Fri Nov 2, 2012 - UPDATE 1-Alcatel mulling sale of submarine, enterprise units-sources
* Studying options to strengthen balance sheet
* Asset sales, debt restructuring possible
* Submarine, enterprise units under management of CFO
* Alcatel exploring pledging of assets to raise debt-source
By Leila Abboud and Gwénaëlle Barzic
PARIS, Nov 2 (Reuters) - Alcatel-Lucent is weighing selling its submarine cable business and a unit that sells telephone systems to big companies as part of its effort to shore up its balance sheet, according to three people familiar with the matter.
The company has yet to hire banks to work on the deals, but a previously announced mid-September move to put the two businesses directly under Chief Financial Executive Paul Tufano is a sign they are candidates for sale, the people said.
Alcatel-Lucent said on Friday it was studying options, including asset sales and a restructuring of its debt, to strengthen its balance sheet after posting a third-quarter loss.
Goldman Sachs analysts estimated that sales of the submarine optic and the corporate telephony units could raise up to 400 million euros. One of the sources said the valuation would be "much higher" without giving details.
The company faces about 2.2 billion euros in debt repayments through end 2015, with a major deadline on January 1, 2015, according to analysts. It has 2.96 billion euros on its balance sheet as of September 30, and nearly 4.63 billion euros of debt outstanding.
In parallel to studying asset sales, the group continues to work on ways to improve its debt structure and monetise its portfolio of 29,000 patents to boost liquidity. It signed a licensing deal with RPX Corp. in February on its patents.
One of the people familiar with the matter said Alcatel-Lucent is studying whether it could pledge some of its assets to raise debt.
"It would be like an asset-backed security," the person said. "The asset sales altogether are too small to solve their financing issues, so they are looking at other ways to improve their credit profile."
Alcatel-Lucent said in July that it was also in negotiations with its banks on renewing a revolving credit facility. In April, part of the company's 1.4 billion euros five-year revolving bank credit facility expired leaving it with 837 million euros available that expires in April 2013.
Sources told Reuters in September that a number of banks have been reluctant to lend due to the uncertainty around the company.
Alcatel-Lucent declined to comment on Friday about the status of the talks on the revolving credit line.
A spokeswoman for the company also declined to comment on the specific asset sales or the options being considered for the debt. "As we said this morning at results, we are reviewing all our options and will communicate when appropriate," she said.
She also said that the reorganization of Alcatel-Lucent's structure announced in September gave CFO Tufano a more operational role. "The reorganization is aimed at giving more visibility on the profitability of each of the businesses," the spokeswoman said.