Less than a week after announcing better than expected third-quarter financials, Alcatel-Lucent has revealed that it intends to raise more than US$2.7 billion from the financial markets as part of its restructuring strategy, known as the Shift Plan.
The vendor aims to raise $750 million from the issue of new bonds, activate a €500 million ($675 million) credit facility, and raise €955 million ($1.29 billion) by offering new stock -- about 460 million ordinary shares at €2.10 each -- to investors that own the company's ordinary shares on November 18. The new stock issue does not, however, apply to holders of ordinary shares based in the US "or any other jurisdiction where such offer for sale of the New Ordinary Shares would be unlawful."
The move comes only days after AlcaLu announced a year-on-year increase in third-quarter revenues to €3.66 billion ($4.95 billion) and a reduced operating loss, numbers that were regarded as a sign that the Shift Plan is already having an impact on the company's financial health. (See Euronews: Alcatel-Lucent Shifts Into Gear.)
News of the capital increase sent Alcatel-Lucent's share price tumbling by more than 7 percent to €2.76.
For more on the Shift Plan:
- Alcatel-Lucent to Cut 10,000 Jobs
- What's Next for AlcaLu-Qualcomm?
- TiMetra at Heart of AlcaLu's Shift
- Alcatel-Lucent Builds Future Around IP
- Alcatel-Lucent Unveils Shift Plan
— Ray Le Maistre, Editor-in-Chief, Light Reading