Facebook Inc (NASDAQ:FB) to Cut its line of credit by 50%

Facebook Inc(NASDAQ:FB) plans to reduce by half a $3 billion line of credit it had arranged to fund employees' tax liability, while the tenure of the loan would be increased to three years from one year, a report said.

The company had arranged for the bridge loan in March to meet tax liabilities for employees who exercised their restricted stock units. However with the fall in the value of its shares, the tax liability has also proportionately reduced.

The financing had been arranged by JP Morgan Chase & Co, Morgan Stanley and Goldman Sachs.

The Wall Street Journal had originally carried the story on the reduction in the line of credit. The social networking site had also arranged for a $5 billion worth of revolving credit ahead of its IPO in May.

Facebook shares have plunged by about 45 percent from the $38 a share they had debuted at its IPO.

Bloomberg, which followed up the story, said that Ashley Zandy, a spokeswoman for Facebook, and Pen Pendleton, a spokesman for Morgan Stanley, declined to comment, as did Michael DuVally, a spokesman for Goldman Sachs, and Jennifer Zuccarelli, a spokeswoman for JPMorgan.

Facebook founder, Mark Zuckerberg, who made a rare public appearance last month managed to infuse some enthusiasm into the Street and its shares rose briefly, but they have been languishing once again.

Most of the erosion in the share price has come after the company's first declared quarterly results, which disappointed investors and analysts, as it showed a slowing growth momentum.

The company is also facing pressure from marketers to monetise its vast subscriber base that have moved to mobile platforms to access the site.