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Netflix raised new $500 million plus $250 million

Netflix raises US$500 million of conventional financing. Netflix Inc, a provider of online streaming media and video-on-demand services, added a loan facility by five conventional creditors to fund capital expenditure and business expansion. The Los Gatos-based company also has an additional loan option of US$250 million.

Tinuku Netflix raised new $500 million plus $250 million

Netflix Inc. acquired new funding in a traditional scheme of conventional banks led by Deutsche Bank AG and Goldman Sachs Group Inc. Other banks also involved in the new syndication are JP Morgan Chase & Co., Morgan Stanley, and Wells Fargo & Co.

The giant online film service company is being heavily indebted to fund the expansion of licensed purchase of movies and television series on a number of producers. Netflix expects more new movies by purchasing original content to attract more customers as a primary revenue driver.

The company founded by Reed Hastings and Marc Randolph in 1997 is getting increasingly pressured by newer players and the strongest competitor today is Amazon and Hulu who have developed original content on their list. On the other hand also HBO as a traditional player.

"A lot of capital up front and then you get paid for years, ironically the faster we grow and the sooner we grow the original stuff we have, the more free cash flow we get," Reed Hastings said in a statement.

Netflix, Amazon and Hulu have been determined to revolutionize the cinema industry from traditional cinema to online platforms. In April 2017 Netflix issued a debt of €1.3 billion (US$1.4 billion). The funds are used to acquire startups and other strategic agreements.

Based on Netflix's report as of June 2017, the company's long-term debt reached US$4.83 billion, up 104 percent compared to June 2016. Netflix's total revenue in June 2017 reached US$5.42 billion, up 33.45 percent.

Netflix shares rose more than 10 percent this month after reporting better-than-expected customer growth. Throughout the year 2017, the company's shares have risen nearly 50 percent. On Friday closed at US$184.04 with a gain of US$1.36 or 0.74 percent.


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