Alcatel-Lucent announces €1.6 billion financing deal

Alcatel-Lucent announces €1.6 billion financing deal

Alcatel-Lucent has announced a €1.6 billion financing deal which could give the French vendor more time to cut its burgeoning costs.

The company has struggled this year with competition from Chinese rivals and a lower telecoms spend from the major operators.

Ben Verwaayen, chief executive of Alcatel-Lucent, is attempting to cut €1.25 billion in costs by the end of 2013 through layoffs and divesting operations in non-core markets. The company is aiming to curb a cash reduction of up to €700 million.

Verwaayen has struggled to fulfill his pledge of September 2008 when he claimed he was going to transform Alcatel-Lucent into a company with a regular profit and healthy cash flows.

Its credit facility, backed by the group’s 29,000 patents and other assets, is expected to be completed in January, and debt will have a maturity ranging up to six years.

According to Reuters, assets including the company’s undersea cable unit could be put up for sale to strengthen its balance sheet.

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