logo
Share SHARE
FONT-SIZE Plus   Neg

WSJ: Alcatel-Lucent Secures $2.1 Bln Debt Financing

Telecom-equipment firm Alcatel-Lucent SA (ALU) has secured a debt financing deal worth 1.6 billion euros or about $2.1 billion with Credit Suisse Group (CS) and Goldman Sachs Group Inc. (GS), the Wall Street Journal reported, quoting people familiar with the matter. The new package is likely to be announced this morning.

Most of the funds will be secured by the company's U.S. assets, which include a portfolio of patents from the Bell Labs research arm and a data-networking business. Thus, if the company defaults, the lenders will have access to these assets before existing creditors. Credit Suisse and Goldman are said to have sought such a protection.

The cash infusion, along with cash on hand, is expected to enable Alcatel-Lucent to pay off debt maturities of 2-3 years. The new loans may have 5-year maturities.

It was reported by the WSJ earlier that Alcatel-Lucent was exploring the possibility of offering its Internet-routing business as collateral for up to 1 billion euros in loans. The company was also said to be considering pledging its valuable portfolio of patents from Bell Labs.

That report said while Alcatel-Lucent has ample cash on hand, it needs a bigger cushion to allay investors' concerns and also to avoid discouraging potential clients from entering into long-term deals. Only then will the company will have enough time to implement 1.25 billion euros in cost cuts, it said.

The stock fell 0.1 percent on Thursday to settle at 0.85 euros in Paris.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
HSBC is reportedly laying off about 100 of its senior investment bankers worldwide, as the banking giant strives to curb operating costs. According to reports, the London-headquartered bank will eliminate managing director and director level employees at the Global Banking and Markets division, as... Samsung Electronics Co., Ltd. (SMSN.L, SSNNF.OB, SSNLF.OB) will reportedly blame faulty batteries for last year's Galaxy Note 7 fiasco. According to a Wall Street Journal report, Samsung's investigation of Galaxy Note 7 smartphones found that some batteries were irregularly sized while others had... Federal investigators have closed their probe of a fatal crash that involved a Tesla Motors Inc. car eight months ago. The regulators said they have found no safety defects in the vehicle's automated driving system and that Tesla's Autopilot-enabled vehicles did not need to be recalled.
comments powered by Disqus
Follow RTT