Struggling Paris-based equipment supplier Alcatel-Lucent is reportedly negotiating a loan with Goldman Sachs to help strengthen its balance sheet.
The terms of the agreement being discussed would see Alcatel-Lucent offer assets as collateral for an…
Struggling Paris-based equipment supplier Alcatel-Lucent is reportedly negotiating a loan with Goldman Sachs to help strengthen its balance sheet.
The terms of the agreement being discussed would see Alcatel-Lucent offer assets as collateral for an undisclosed sum, Bloomberg reported citing unidentified sources familiar with the matter. Both Alcatel and Goldman Sachs declined to comment.
Announcing the company’s Q3 results early this month, Alcatel CEO Ben Verwaayen said it is considering disposals to cut debt. While he did not specify which assets may be sold, he noted that the company has “a broad spectrum” of non-core assets. He declined to comment on suggestions that the submarine cable business is among disposal possibilities. However, CFO Paul Tufano noted that it is an “extremely attractive business” with excellent growth potential.
Today’s Bloomberg report cited sources familiar with the matter as saying the sales of assets including the submarine business and a business equipment unit are being considered. According to the report, Alcatel-Lucent has not yet hired financial advisers for the sales, which may raise less than €1bn each.
Alcatel-Lucent reported revenues of €3.56m for Q3, down 2.8% year-on-year. The company is currently executing a €1.25bn restructuring programme which it claimed had saved €450m by the end of Q3.
Commenting on the results, Verwaayen said the company is 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.
