Wednesday 23 May 2018

Alcatel-Lucent likely to sell assets

Paris, November 3, 2012

Telecom equipment maker Alcatel-Lucent may sell assets to strengthen its balance sheet after posting a second straight quarterly loss as its customers around the world cut spending on mobile and fixed networks.

Third-quarter revenue fell 2.8 per cent year-on-year to 3.6 billion euros ($4.66 billion) in response to lower spending on network gear in the US and Asia, and a steep 15 per cent decline in Europe.

Chief financial officer Paul Tufano said the group was considering options such as "reprofiling our debt or an infusion of liquidity, including asset sales".

Alcatel's submarine cable business and a unit that sells telephone systems to big companies are both candidates for sale.

Goldman Sachs analysts estimated that sales of the submarine optic and the corporate telephony units could raise up to 400 million euros.

A source said the valuation would be "much higher", without giving details, while Bernstein analyst Pierre Ferragu said the submarine business alone could attract bids of over $1 billion "if sold at its best".

Despite making cost cuts, Alcatel-Lucent burned through 1.03bn euros in the first nine months of this year, compared with 978 million euros last year.

The company faces about 2.2 billion euros in debt repayments through to the end of 2015, with a major deadline on January 1, 2015, according to analysts.-Reuters

Tags: assets | Europe | Alcatel-Lucent |

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