& cplSiteName &

Lucent Beefs Up Credit Line

Light Reading
News Analysis
Light Reading
2/23/2001
50%
50%

Lucent Technologies Inc. (NYSE: LU) has beaten a deadline to obtain $6.5 billion in credit (see Lucent Secures $6.5B Credit Line).

CEO Henry Schacht and CFO Deborah Hopkins had been working hard to obtain the credit, which was needed to back up Lucent's cash reserves (see Lucent Restructuring: Mixed Bag).

Lucent says it already had cash on hand of about $3.8 billion as of December 31. But it needed more in order to improve its liquidity and help meet the costs associated with its seven-point restructuring plan. That plan, outlined by Schacht in January (see Lucent Loses $1 Billion, Plans Big Layoff), includes slashing expenses, eliminating product lines, and expanding its reliance on contract manufacturers to reduce headcount.

The transactions announced today include Lucent's procurement of $4.5 billion in a 364-day credit facility from undisclosed banks. This part of the transaction was arranged by J.P. Morgan & Co. (Nasdaq: JPM) and Salomon Smith Barney. It includes $2 billion in a new credit line that replaces one that expired this week. It also includes $2.5 billion of debt that will be assumed by Agere Systems when it goes public later this year (see Agere Aims for $8.5 Billion IPO).

Lucent also revised an existing $2 billion facility to bring it into line with the rest of the credit transactions. "We now have one cohesive package," a spokeswoman says. "These cash reserves will provide liquidity as we execute our turnaround."

-- Mary Jander, senior editor, Light Reading http://www.lightreading.com

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Featured Video
Flash Poll
Upcoming Live Events
September 17-19, 2019, Dallas, Texas
October 1-2, 2019, New Orleans, Louisiana
October 10, 2019, New York, New York
October 22, 2019, Los Angeles, CA
November 5, 2019, London, England
November 7, 2019, London, UK
December 3, 2019, New York, New York
December 3-5, 2019, Vienna, Austria
March 16-18, 2020, Embassy Suites, Denver, Colorado
May 18-20, 2020, Irving Convention Center, Dallas, TX
All Upcoming Live Events