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Alcatel-Lucent to Raise $2.7B

Ray Le Maistre

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:

— Ray Le Maistre, Editor-in-Chief, Light Reading

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User Rank: Light Sabre
11/5/2013 | 3:56:42 AM
Re: Combes maintains momentum
ALU's biggest problem is all the legacy technology they still have, they have to finish their restructuring before they run out of free cash flow. If they just had their IPD and development to worry about they'd be fine.  Doing restructuring in Europe is a pretty tall order.
User Rank: Blogger
11/4/2013 | 12:50:19 PM
Re: Combes maintains momentum
I assume this dissolves any prospects that ALU might pursue an all-out merger with NSN, as had been rumored in recent weeks. But, could ALU still sell some assets to make itself more attractive to potential new investors?
[email protected],
User Rank: Blogger
11/4/2013 | 5:22:23 AM
Combes maintains momentum
CEO Michel Combes is keeping his foot on the pedal and is making the most of the company's improved valuation -- even though the share price has taken a 7% hit in Monday morning trading in Paris, the share price is still up by almost 200% compared with the start of the year. 

Can ALU come out the other side intact? Let's see what assets it will try to sell in the coming months -- the future of its mobile networking division looks to be at the heart of its strategic fulcrum. 
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