Equipment maker Alcatel-Lucent is looking to raise a total US$2.72bn in both equity and debt financing, as part of its turnaround strategy.
The loss-making company has today announced the launch of a €955m (US$1.3bn) capital increase, which will see…
Equipment maker Alcatel-Lucent is looking to raise a total US$2.72bn in both equity and debt financing, as part of its turnaround strategy.
The loss-making company has today announced the launch of a €955m (US$1.3bn) capital increase, which will see it issue preferential subscription rights to holders of existing ordinary shares.
The new shares will be sold at €2.10, below Alcatel’s current share price which stood at €2.83 at the time of going to press.
Shareholders, excluding those in the US, will be able to buy eight new ordinary shares for every 41 existing ordinary shares. Overall, up to 460 million shares will be issued, representing a 20% increase of the company’s capital.
The subscription period will start on 19 November and end 10 days later.
Banks working on the capital increase include Merrill Lynch, Credit Agricole, Deutsche Bank as global coordinators and joint bookrunners. Citigroup, JP Morgan, Goldman Sachs, HSBC, Morgan Stanley and Natixis are also acting as joint bookrunners.
Ondra has been mandated as financial adviser.
Alcatel is also looking to launch a US$750m high-yield bonds offering and is planning to implement a €500m (US$675.4m) syndicated revolving credit facility.
CFO Jean Raby was quoted saying today that the company intends to repay debt maturing in 2014 and 2015 from the share sale and bond offering proceeds.
In June, the equipment company launched a plan to generate €1bn in fixed-cost savings, which includes 10,000 job cuts, as well as €2bn in debt re-profiling over the period 2013-2015, and future debt reductions of €2bn.
When announcing its third-quarter results late last week, Alcatel CEO Michel Combes also confirmed it is forging ahead with plans to sell assets worth €1bn (US$1.4bn) by 2015.
The French company reported losses of €200m, which include restructuring charges of €117m. Revenues reached €3.7bn, up 7% year-on-year.
Alcatel has been facing intense competition from European and Chinese rivals, including Nokia and Huawei. Combes previously said he wants to reposition the loss-making company from a telecoms equipment generalist to “an industrial specialist in IP networking and ultra-broadband access”.
Since the recovery programme was announced in mid-June, Alcatel’s shares have gone up about 100%.
