Alcatel-Lucent to raise cash for recovery drive

LOSS-MAKING telecom equipment maker Alcatel-Lucent plans to raise €955m (£808m) from shareholders and $750m from a high-yield bond to cut debt and drive what its boss has called a last-ditch effort to save the group.

Chief executive Michel Combes launched his Shift plan in June, including 10,000 job cuts, €1bn of cost savings and €1bn of asset sales. He is aiming to revive a firm which has struggled against low-cost Asian competitors as well as larger rivals Ericsson and Nokia since its creation in 2006.

The Franco-American company said yesterday it planned to sell new shares at €2.10 apiece, a hefty discount to the current share price.

Combes, who has pledged to slash Alcatel-Lucent’s debt and had earlier flagged that a capital increase might be needed, said the fundraisings were a key part of his turnaround plan.

“In the past few months, we have gotten renewed confidence from customers and the market, and this allowed us to proceed immediately with these three financial operations today,” he said on a conference call.

The new shares will be offered to current holders of Alcatel-Lucent stock, who will be given one right for every share they own as of 18 November.

A shareholder needs 41 rights to be able to buy eight of the newly issued shares.