GO
Loading...

Alcatel-Lucent launches $1.3 million capital increase

Monday, 4 Nov 2013 | 3:19 AM ET
Bloomberg/Contributor | Bloomberg | Bloomberg via Getty Images

Lossmaking telecoms equipment maker Alcatel-Lucent will launch a 955 million euro ($1.29 billion) capital increase and a $750 million high-yield bond to shore up its balance sheet amid what its chief executive calls a last-ditch effort to save the company.

The Franco-American group, which competes with larger rivals Ericsson, Huawei and and Nokia, said in a statement that it will also put in place a 500 million euro new syndicated revolving credit facility.

Shares were down 4 percent to 2.85 euros on the Paris stock market at 0812 GMT after falling as much as 8 percent.

(Read more: Alcatel-Lucent to cut 10,000 jobs)

The moves are the latest elements of Chief Executive Michel Combes' turnaround plan, which began in June and consists of 10,000 job cuts, 1 billion euros of cost cuts and 1 billion of unspecified asset sales.

"The purpose of the capital increase is to strengthen the equity of the company," said Alcatel-Lucent.

(Read more: Alcatel-Lucent CEO: Turnaround just needs time)

The capital increase will be offered to current holders of Alcatel-Lucent shares, who will receive one share for every share they own as of November 18. The subscription price for the new shares will be 2.10 euros and between 454,722,512 and 460,000,000 new shares will be issued.

The subscription period runs from November 19 to November 29.

Holders of shares in the United States will not be eligible for the share issue, the company said.

Follow us on Twitter: @CNBCWorld

  Price   Change %Change
ALU
---

Featured

Contact Technology

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More
  • Matt Hunter is the senior technology editor at CNBC.com.

  • Cadie Thompson is a tech reporter for the Enterprise Team for CNBC.com.

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.

  • Jon Fortt is an on-air editor. He covers the companies, start-ups, and trends that are driving innovation in the industry.

  • Lipton is CNBC's technology correspondent, working from CNBC's Silicon Valley bureau.

  • Mark is CNBC's Silicon Valley/San Francisco Bureau Chief covering technology and digital media.