Alcatel (ALU) Puts Key Assets at Risk in Effort to Raise New Capital
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Alcatel-Lucent (NYSE: ALU) is sinking Friday morning amid news that it might need to offer-up assets as collateral to secure much-needed financing.
The WSJ notes today that all units are up for evaluation, including its key Internet-routing business and even its Bell Labs patent portfolio, to get about €1 billion in fresh capital.
Analysts say that Alcatel has enough cash to keep running, but the latest round is to put investors' minds at ease and avoid deterring potential clients.
Thursday, Alcatel was taken off of the CAC-40, France's benchmark index. Moody's also cut its rating on the company last week.
Something must be done for Alcatel to garner enough time to implement €1.2 billion in cost cuts it had planned.
One risk on Alcatel's plans comes if it sink into bankruptcy. At that point, those key assets would then be owned by creditors...another potential deterrent to company's entering longer-term deals.
Shares are down 3 percent on the session.
The WSJ notes today that all units are up for evaluation, including its key Internet-routing business and even its Bell Labs patent portfolio, to get about €1 billion in fresh capital.
Analysts say that Alcatel has enough cash to keep running, but the latest round is to put investors' minds at ease and avoid deterring potential clients.
Thursday, Alcatel was taken off of the CAC-40, France's benchmark index. Moody's also cut its rating on the company last week.
Something must be done for Alcatel to garner enough time to implement €1.2 billion in cost cuts it had planned.
One risk on Alcatel's plans comes if it sink into bankruptcy. At that point, those key assets would then be owned by creditors...another potential deterrent to company's entering longer-term deals.
Shares are down 3 percent on the session.
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