Alcatel-Lucent to sell off part of submarine business in IPO
French vendor Alcatel-Lucent is reportedly planning to sell off part of its submarine cable unit in an IPO, in the company’s latest bid to turn around its fortunes.
The company’s CEO Michel Combes is targeting an IPO for the first half of 2015, and it will use the capital to potentially expand the business away from the telecoms sector.
This could include investments into other industries including oil and gas, with Combes trying to rejuvenate the company following the merger between Alcatel SA and Lucent Technologies.
The merged entity has suffered years of losses, job cuts and divestment of assets.
Its submarine unit is reportedly worth up to €800 million after a valuation by Kepler Capital Markets, and an IPO would include the company’s last French production site in Calais. According to the company, it has installed over 500,000km of cable in the 100 years it has operated at the site.
Combes said Alcatel-Lucent would still maintain a majority stake in the business and any IPO would be a small part of the company’s forecasted asset disposal, which it expects to bring in €1 billion by the end of 2015.
The vendor has struggled to compete with the likes of Ericsson and Huawei in recent years, but Combes claimed the company’s recovery is now on track.
“Alcatel-Lucent’s turnaround is on track,” he said. “This fourth consecutive quarter of consistent execution has allowed us to close the first quarter of our transformation plan.”
Combes’ plans to cut assets by €1 billion comes at a time when other struggling vendors are assessing their options in the convoluted market. Nokia has recently sold off its mobile unit to Microsoft and Huawei is expanding its R&D operations across Europe to gain more access to the region.
According to Bloomberg, Combes is forecasting a recovery for European network equipment in the next 18 to 24 months.