Dell struggling to raise funds to finance $67bn EMC acquisition

On the hook for $4bn if it fails to complete the deal

Dell is struggling to raise the funds it needs to complete its $67bn purchase of storage hardware vendor EMC, according to reports.

The company needs to raise around $45bn on the financial markets, but is struggling to nail down the funding, according to the New York Post.

It suggests that Dell is struggling to complete its funding deal due to rocky global stock markets and a consequent tightening of credit markets. The company is also trying to offload its Perot Systems computer services business for as much as $5bn, but buyers have been dropping out - also partly due to the uncertain global financial outlook.

Atos, for example, had been a front-runner to acquire Perot, a US-focused services company founded by Ross Perot after he sold EDS, which would have complemented Atos's Europe-focused business. It, however, dropped out of the race recently, due to the growing global economic uncertainty.

Other potential buyers in the frame, according to the New York Post, include Tata Consultancy Services and NTT Data.

However, Dell remains confident of announcing a deal for the sale of Perot "in a few weeks".

What's more, if Dell is unable to raise the funds to acquire EMC and, hence, to complete the deal, it will be obliged to pay EMC a $4bn break-up fee. JP Morgan is leading the group of banks working on the debt deal on Dell's behalf.

Nevertheless, the company remains adamant that the deal will be completed - with the close scheduled for October: "The EMC transaction is on schedule under the original timetable and the original terms," a Dell spokesperson told The New York Post.

Dell founder Michael Dell took the company private in a 2013, $24bn deal part-financed by private equity. In addition to using a chunk of his own personal fortune, Dell was joined by Silver Lake Management as well as a consortium of lenders. That was on top of the 16 per cent stake in Dell that he already owned.

The Dell privatisation was one of a number of deals in the tech sector financed by private equity in recent years. Other big names to sell-out to private equity buyers include BMC Software, Informatica, Compuware and Tibco.