BARCELONA Nov 15 Telecom equipment maker
Alcatel-Lucent is looking at options including
asset-backed financing to strengthen its balance sheet, it said
Chief Financial Officer Paul Tufano told a Morgan Stanley
conference the company was looking at measures with regard in
particular to convertible debt due in 2015.
"(There are) three options, four options," he said at the
investment bank's Technology, Media and Telecoms conference.
"We are doing the research (so) that it will provide the
ability to take the liquidity issue off the table. Specifics are
actively being worked right now."
"I can tell you we are extremely focused on it," he added.
Speaking on the sidelines of the conference, Tufano said the
company was looking at monetising its "very robust" patent
portfolio, either through licensing or selected sales.
It was seeing interest in the patents from a lot of
different sources, he said.
Asked whether he was considering asset-backed financing, he
replied that it was a "possibility".
"We are evaluating a number of choices," he said.
Options being discussed with banks include pledging the
submarine cable business, patents, or other assets to back the
debt, three sources familiar with the matter told Reuters.
"They are looking to back it with a 'collateral package'
which could include patents and submarine assets," said one
"But we don't know if that will work because they have
negative covenants on their debt and there are so many different
Banks including JP Morgan, Citigroup, Societe Generale,
Deutsche Bank, BNP Paribas, and others are being consulted by
Alcatel, the sources said.
"There are a lot of banks around this, pitching ideas for
the right structure to get the right amount of liquidity," said
a second person.
"The company has to be more creative. It's no longer a
situation where it can just print a bond deal at 9.25 percent."
Alcatel also said earlier this month the company could sell
assets to strengthen its balance sheet after posting a second
straight quarterly loss.
The company faces about 2.2 billion euros in debt repayments
through to the end of 2015, with a major deadline on Jan. 1,
2015, according to analysts.
Tufano said on Thursday that weak macroeconomic conditions
were hampering demand, especially in western Europe, and China
was more muted than it had been.
But he said the group had good traction with LTE (next
generation mobile technology), particularly in the United
States, where its customer AT&T is increasing capital
investment. He said he hoped to get "a fair share" of AT&T's