Alcatel-Lucent launches 955 mln euro capital increase

Reuters

PARIS, Nov 4 (Reuters) - Loss-making telecom equipment makerAlcatel-Lucent will launch a 955 million euro ($1.29billion) capital increase and a $750 million high-yield bond toshore up its balance sheet amidst what its chief executive callsa last-ditch effort to save the company.

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

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

The moves are the latest elements of Chief Executive MichelCombes' turnaround plan, which began in June and consists of10,000 job cuts, 1 billion euros of cost cuts and 1 billion ofunspecified asset sales.

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

The capital increase will be offered to current holders ofAlcatel-Lucent shares, who will receive one share for everyshare they own as of Nov. 18. The subscription price for the newshares will be 2.10 euros and between 454,722,512 and460,000,000 new shares will be issued.

The subscription period runs from November 19 to November29.

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

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