Alcatel-Lucent to go for capital increase after solid 3Q

Telecom infrastructure provider Alcatel-Lucent is launching a capital increase in the amount of €955 million to strengthen its equity and provide it with greater financial flexibility. 

Alcatel-Lucent will issue preferential subscription rights to existing stockholders, with shareholders receiving one right for every ordinary share held. The new shares will be priced at €2.10 per share. The company said the intention was to strengthen its equity.

The infrastructure giant also plans to raise US$750 million (€556 million) via a high-yield bond offering and execute a commitment letter for the implementation of a new syndicated revolving credit facility of €500 million.

The move followed strong third-quarter results for Alcatel-Lucent, with a 7% increase in revenue to €3.668 billion and improved net income of €116 million, or 3.2% of revenues, up from negative 3.5% for the same period last year.

Revenue from the fixed networks division amounted to €541 million, up 0.7%, boosted by sales of its VDSL2 vectoring products, new FTTH contracts wnd the launch of its new Ethernet Passive Optical Networking (EPON) fibre system aimed at helping cable operators address the business market.

Michel Combes, CEO of Alcatel-Lucent, said: “We are seeing the first positive signs of our new operating model in our day-to-day business and are encouraged by the substantial progress in the Shift Plan key metrics. Going forward, we remain fully focused on execution to leverage the momentum we are building.”

Alcatel-Lucent has set an objective of raising €1 billion from the sale of assets as part of its Plan Shift.