PARIS, Nov 4 (Reuters) - Loss-making telecom equipment maker Alcatel-Lucent will launch a 955 million euro ($1.29 billion) capital increase and a $750 million high-yield bond to shore up its balance sheet amidst what its chief executive calls a last-ditch effort to save the company.
The Franco-American group, which competes with larger rivals Ericsson, Huawei and and Nokia, said in a statement that it will also put in place a 500 million euro new syndicated revolving credit facility.
Shares were down 4 percent to 2.85 euros on the Paris stock market at 0812 GMT after falling as much as 8 percent.
The moves are the latest elements of Chief Executive Michel Combes’ turnaround plan, which began in June and consists of 10,000 job cuts, 1 billion euros of cost cuts and 1 billion of unspecified asset sales.
“The purpose of the capital increase is to strengthen the equity of the company,” said Alcatel-Lucent.
The capital increase will be offered to current holders of Alcatel-Lucent shares, who will receive one share for every share they own as of Nov. 18. The subscription price for the new shares will be 2.10 euros and between 454,722,512 and 460,000,000 new shares will be issued.
The subscription period runs from November 19 to November 29.
Holders of shares in the United States will not be eligible for the share issue, the company said.