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
Rare commodities are worth more than good is a Chinese adage. And more so when it is in the sought-after drug space. Rare and ultra-rare diseases, also called orphan and ultra-orphan diseases, as the names imply, affect very small numbers of patients. So why the clamor? Shares of steel giant ArcelorMittal were losing around 4 percent in the early morning trading in Amsterdam after the company reported sharp decline in first-quarter EBITDA, a key earnings metric, as sales were weak with lower prices and production. Net loss, however, narrowed from last year. The company also confirmed its forecast for annual EBITDA, which is lower than last year. As the din settles down on a dismal quarter at one of the world's exciting tech company, it is time to sit back and take stock of what went wrong and will the wrong be righted in the near term?
comments powered by Disqus
Follow RTT