UPDATE 2-Alcatel-Lucent seeks to raise $2 bln for recovery drive
* Plans to raise 955 mln euros from shareholders
* To issue high-yield bond of $750 mln
* New revolving credit facility worth 500 mln euros
* Moves are part of CEO's turnaround effort
* Shares down 6.2 percent, trimming recent gains
(Adds CEO, investor comments, detail, background, shares)
PARIS, Nov 4 (Reuters) - Loss-making telecom equipment maker Alcatel-Lucent plans to raise 955 million euros ($1.3 billion) from shareholders and $750 million 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, 1 billion euros of cost savings and 1 billion euros of asset sales, in a bid to revive a firm which has struggled against low-cost Asian competitors as well as larger rivals Ericsson and Huawei since its creation in 2006.
The Franco-American company said on Monday it planned to sell new shares at 2.10 euros apiece, a hefty discount to the current share price.
At 1040 GMT, Alcatel-Lucent shares were down 6.2 percent at 2.78 euros, after falling as much as 9.3 percent. Shares often fall after the announcement of a new share issue, which can dilute earnings per share for existing investors.
Analysts and traders said the fundraisings, which were accompanied by plans for a 500 million euro syndicated revolving credit facility, were not a surprise, but earlier than expected, probably due to a recent surge in Alcatel-Lucent shares.
"After the sharp rise in the shares last week, the fall this morning is relatively small," said Franklin Pichard, a director at Barclays Bourse, which advises investors and owns Alcatel shares. "That means that Alcatel is no longer feared by investors."
Pichard added he planned to take part in the capital increase.
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.
"They will help the company manage its own destiny and restore competitiveness."
The new shares will be offered to current holders of Alcatel-Lucent stock, who will have the right to buy one new share for every share they own as of Nov. 18.
Between 454,722,512 and 460,000,000 shares will be issued, the company said, adding the subscription period would run from Nov. 19 to Nov. 29.
Holders of shares in the United States will not be eligible for the share issue, the company added in a statement.
A Paris-based trader said the capital increase was expected, as was the rough amount, but that the timing was "clearly shorter than expected".
"At very first glance, we calculate a 15 percent dilution," the trader said.
Alcatel-Lucent likely chose to carry out a capital increase now because the shares have been surging on hopes for its latest turnaround plan - up almost 200 percent this year, compared with a 21 percent rise in the European tech index
The group also reported third-quarter results last Thursday that sent the shares up nearly 20 percent.
Since June, Combes has reprofiled Alcatel's debt maturities significantly, reducing the amount due by the end of 2016 to 876 million euros from 2.03 billion.
Once the share sale and bond are carried out, the company said it intends to repay 2014 and 2015 debt issuances, Chief Financial Officer Jean Raby said on Monday.
After the moves, the group's net debt will be roughly between "break even" and 50 million euros, he added.
As of Sept. 30, Alcatel-Lucent's net debt was 1 billion euros.
($1 = 0.7414 euros)
(Additional reporting by Alexandre Boksenbaum-Granier; Editing by Geert De Clercq and Mark Potter)