Facebook Inc, the social networking firm, has hired more banks to work as underwriters for its initial public offering, according to a report.
Going by the Bloomberg report, three banks which are set to be added are Deutsche Bank, Credit Suisse and Citigroup. Earlier, it was reported that Facebook had hired Morgan Stanley, JPMorgan Chase & Co., Goldman Sachs Group Inc., Bank of America Corp., Barclays Plc and Allen & Co. were the for the IPO.
This will be a move in an attempt by Facebook to take advantage of its position to get more finance.
According to an earlier report by Reuters, it is planning to raise its $2.5 billion credit line to facilitate paying taxes on its employees' restricted stock units when they vest six months after the company's initial public offering.
Facebook, which has filed the prospectus for its initial public offering seeking to raise $5 billion in initial funding, is yet to set its price range for the IPO. According to the filing, Facebook first turned a profit in 2009 when it earned $229 million on $777 million in sales.
At the end of 2011, the company had $3.9 billion in cash and marketable securities, up from $1.8 billion at the end of 2010. Still, it will need billions of dollars to face the big tax hit.
It has to be seen how its share prices are going to grow with the advent of the IPO. Along with the rise of share price, the tax obligation will also increase. This means it will have to increase its present borrowing capacity of $2.5 billion.