French government eyeing Alcatel subsea unit?

French government eyeing Alcatel subsea unit?

The French government is reportedly looking to acquire Alcatel-Lucent’s subsea cable unit to ease financial pressure on the vendor.

The telecoms equipment vendor struggled in 2012 due to competition from Chinese rivals and lower telecoms spend from operators.

French business newspaper Agefi reports that France’s sovereign wealth fund is one of several potential buyers for the unit, citing unnamed sources.

The country’s government is said to be concerned regarding Alcatel’s plans to use its 29,000 patents as collateral for a €1.6 billion loan from Credit Suisse and Goldman Sachs, as it would potentially allow intellectual property to fall under foreign banks' control.

The loan deal is aimed at helping Alcatel cope with incoming debt maturities and fund its ongoing restructuring, which is aimed at cutting costs of €1.25 billion by the end of 2013 through layoffs and divesting operations in non-core markets.

Les Echos reported in December that the French government was looking to arrange a deal that would see part of the cable unit sold to France Telecom.

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