France’s Alcatel-Lucent has reportedly upped the amount it aims to raise in its planned refinancing by US$550m to US$2.65bn following strong demand from investors.
The package now consists of a US$1.75bn six-year first-lien loan, a US$500m,…
France’s Alcatel-Lucent has reportedly upped the amount it aims to raise in its planned refinancing by US$550m to US$2.65bn following strong demand from investors.
The package now consists of a US$1.75bn six-year first-lien loan, a US$500m, three-and-a-half year first-lien term loan and a €300m (US$399m) six-year first-lien loan, news agencies reported, citing people with knowledge of the deal.
The Paris-based telecoms equipment manufacturer announced in mid-December 2012 that it had secured €1.615bn (US$2.1bn) in financing underwritten by Credit Suisse and Goldman Sachs. At the time, the company said the senior secured-credit facilities would be denominated in US dollars and euros, and have maturities of between three-and-a-half and six years. It added that they would likely be secured against its intellectual property portfolio.
Investors were attracted to the deal’s relatively high yield, the reports stated.
The financial covenants of the deal have since been relaxed, while pricing has also been cut, they added.
An Alcatel-Lucent spokesperson said that the company is pleased with the progress it is making with its refinancing plans and expects to have everything concluded by the end of January.
Announcing the original €1.615bn (US$2.1bn) refinancing agreement, CEO Ben Verwaayen said proceeds would be used to extend the company’s maturity profile over the next few years and help it achieve previously-announced “performance priorities”, which include a cost-cutting target of €1.25bn and re-evaluating unprofitable managed services contracts and geographic markets.
Alcatel-Lucent reported revenues of €3.56bn for Q3, down 2.8% year-on-year. The company is currently executing a €1.25bn restructuring programme which it said had saved it €450m by the end of Q3.
Commenting on the Q3 results, Verwaayen said the company was aiming for a positive net cash situation at year-end.
“We are taking action to strengthen our balance sheet and we are reviewing a variety of options, which we will communicate when appropriate,” he said.
