French vendor Alcatel-Lucent is considering listing part of its submarine cables unit on the stock exchange next year in an additional effort to turn itself around.
The potential IPO is earmarked for the first half of 2015, subject to market conditions,…
French vendor Alcatel-Lucent is considering listing part of its submarine cables unit on the stock exchange next year in an additional effort to turn itself around.
The potential IPO is earmarked for the first half of 2015, subject to market conditions, the Paris-based company said in a statement on its financial results for the second quarter.
Alcatel intends to retain a majority stake.
Specifically, the company said the aim of the IPO is “to finance the reinforcement of [Alcatel-Lucent Submarine Networks’] leadership in telecom submarine systems and its diversification into the oil and gas market, to increase its visibility and optimise capital allocation”.
Last year, Alcatel tried to find a buyer for the submarine cables unit, which Kepler Capital Markets has valued at up to €800m (US$1.07bn), Bloomberg reported.
Group CEO Michel Combes said on a conference call today that the company’s turnaround strategy is “on track”.
The strategy, announced in June 2013, is designed to raise €1bn in asset sales by the end of 2015, slash fixed costs by €1bn and cut debt.
Combes said today that the IPO will raise “a small part” of the €1bn asset disposal target.
Alcatel, listed on the Paris and New York stock exchanges, reported revenues for Q2 2014 of €3.28bn (US$4.39bn), up 0.7% year-on-year. The group posted a net loss of €298m (US$399m) for the period, an improvement on last year when it reached €885m (US$1.18bn).
Alcatel has been facing intense competition from European and Chinese rivals. Combes has previously said he wants to reposition the company from a telecoms equipment generalist to “an industrial specialist in IP networking and ultra-broadband access”.
In February, Alcatel revealed that it was in exclusive talks with China Huaxin after receiving a binding offer for its enterprise unit, which valued the subsidiary at €268m. At the time, the company said a definitive agreement was expected in Q2 2014 and closing to take place in Q3. Lazard has reportedly advised Alcatel on the transaction.
