“Alcatel-Lucent SA (ALU) Chief Executive Officer Michel Combes plans to sell at least 1 billion euros ($1.3 billion) of assets and reduce costs by another 1 billion euros to stem losses and focus on businesses including ultra-high speed Internet.
Shares jumped as much as 5.6 percent after Combes said that the time the plan is fully executed in 2015, the company will have positive free cash flow and be more tightly focused on its most remunerative areas after cutting out legacy operations.
“It’s a strategic turning point for the company,” he said during a conference call. “For the first time, it’s making strong industrial choices.”
Combes, who took over almost three months ago after predecessor Ben Verwaayen’s asset sales and firings failed to achieve a turnaround, wants to execute his plan by 2015 to keep the French network equipment vendor’s cash from further dwindling after seven consecutive years of decrease. Alcatel then will look to cut its debt by 2 billion euros by selling shares on the stock market or through further asset sales, the Paris-based group said in a statement.
Alcatel-Lucent shares were up 5.2 percent at 1.49 euros at 9:04 a.m. in Paris, more than double what they were worth when they hit a 23-year low in October.
