“Alcatel-Lucent SA (ALU) reached a 1.6 billion-euro ($2.1 billion) financing deal, gaining time to overhaul the French phone-equipment maker and try to sell as much as 1.5 billion euros of assets.
The senior secured credit facilities underwritten by Credit Suisse Group AG (CSGN) and Goldman Sachs Group Inc. (GS) will be denominated in U.S. dollars and euros, with maturities of 3 1/2 to six years, the Paris-based company said today. The stock gained as much as 15 percent and the company’s 8.5 percent bonds jumped to the highest since in almost eight months.
The funding will allow Alcatel to “aggressively” consider all options to boost profitability, improve its strategy and shore up the company’s finances, Chief Executive Officer Ben Verwaayen said in the statement.
The CEO has so far sold smaller assets, cut jobs and costs and signed a patent-licensing agreement. Those measures have failed to reduce an average annual cash consumption of 700 million euros since the 2006 merger of Alcatel SA and Lucent Technologies.
The company, whose debt is rated junk by Moody’s Investors Service and Standard & Poor’s, faces more than 2 billion euros of debt repayments over three years.”
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