Seeking Alpha

Alcatel-Lucent seeks to boost finances with stock and bond issue

  • Alcatel-Lucent (ALU) intends to raise around €955M by selling 454.7-460M new shares at €2.10 each as part of a plan to improve its equity.
  • The telecom equipment maker will also launch a $750M high-yield bond and put in place a €500M new syndicated revolving credit facility.
  • Shares are -3.6% at €2.86 in Paris. (PR)
Comments (11)
  • User 6348921
    , contributor
    Comments (83) | Send Message
     
    Dilution bomb!! ouch...
    4 Nov 2013, 04:05 AM Reply Like
  • Andreas Hopf
    , contributor
    Comments (7876) | Send Message
     
    Ouch?

     

    Like this morning in Europe (-6,5% that was a gift), I see this as yet another accumulation opportunity. €2,10 per share, when preferential right is exercised. See http://bit.ly/1hdeDLu Accordingly, NASDAQ pre-bell no big drama.
    4 Nov 2013, 07:58 AM Reply Like
  • JoseV
    , contributor
    Comments (397) | Send Message
     
    AH, you are right again, minutes ups and downs dont count in investing, look at he price in Europe now and by the end of the day ALU will be up once the market recognizes the genius of the issuance which is to reduce debt.
    4 Nov 2013, 08:03 AM Reply Like
  • Andreas Hopf
    , contributor
    Comments (7876) | Send Message
     
    I'd always be careful. Pre-bell NASDAQ looks good, but things may change at an instant. Remember the recent AMD disaster. In any case, for longer term holders, €2,10 is a good offer. That's what I found most relevant today.
    4 Nov 2013, 08:31 AM Reply Like
  • jamesingram32
    , contributor
    Comments (542) | Send Message
     
    This could well be a very short term hit on the shares, as debt restructuring makes total sense in a turnaround such as this. Read further into the initial announcements.
    '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 November 18. ' so not so ouchy, and also
    Alcatel-Lucent said it intends to repay 2014 and 2015 debt issuances once it launches a 955 million euro ($1.3 billion) capital increase and a high-yield bond.
    4 Nov 2013, 04:19 AM Reply Like
  • JoseV
    , contributor
    Comments (397) | Send Message
     
    JI, Good read. This is claassic among companies who are undergoing good turnaround and is very good news for Long holders, i expect ALU to rebound very quckly from this mornings drop and wouldnt be surprised for the stock to hit 3.50 by Dec 31. Good time to buy right now! As a long i will increase my holdings by taking advantage of the discounted issuance.
    4 Nov 2013, 04:27 AM Reply Like
  • JoseV
    , contributor
    Comments (397) | Send Message
     
    Meant €3.50 by Dec 31.
    4 Nov 2013, 04:47 AM Reply Like
  • jamesingram32
    , contributor
    Comments (542) | Send Message
     
    thanks Jose. As a long, i'm happy to wait, however, I have a basket of Jan calls as well, so €3.50 would be great for me
    4 Nov 2013, 06:06 AM Reply Like
  • jamesingram32
    , contributor
    Comments (542) | Send Message
     
    in fact, it looks as if the market has already analysed and digested, and moved the price back upwards today, so the buying opportunity was brief here.. As I speak we are at $3.85. Let's see what full market does.
    4 Nov 2013, 07:10 AM Reply Like
  • jamesingram32
    , contributor
    Comments (542) | Send Message
     
    latest reuters coverage.
    http://reut.rs/1hdd14o

     

    this is turning rather positive for ALU now.
    'Analysts and traders said the fundraisings, which were accompanied by plans for a 500 million euro syndicated revolving credit facility, were not a surprise, but came earlier than expected, probably due to a recent surge in the firm's shares.

     

    "After the sharp rise in the shares last week, the fall this morning is relatively small," said Franklin Pichard, a director at Barclays Bourse, which advises investors and owns Alcatel shares.

     

    "That means that Alcatel is no longer feared by investors," he said, adding he planned to take part in the capital increase.'
    4 Nov 2013, 07:42 AM Reply Like
  • jessten
    , contributor
    Comments (18) | Send Message
     
    Get this out of the way so ALU can move forward with NOK type acquisition?
    4 Nov 2013, 06:49 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|