Alcatel-Lucent (NYSE: ALU) has hatched a plan to raise $1.3 billion from its shareholders and $750 million from a high-yield bond that company CEO Michel Combes says will reduce debt and save the company, reports Reuters.
Part of Combes' "Shift" plan that was announced in June includes laying off an additional 10,000 employees. These job cuts will be worldwide and will occur by the end of 2015.
The Shift plan will focus on leveraging emerging technologies, including network functions virtualization (NFV) and software defined networking (SDN) technologies.
A cost cutting effort made by Combes' predecessor Ben Verwaayen to cut 5,500 jobs last year wasn't enough to turn around the company, which has posted losses every year since it was formed in 2006.
Alcatel-Lucent will sell the new shares at $2.83 apiece.
Combes, according to the Reuters report, said raising new capital was part of his plans to revive the company.
"In the past few months, we have gotten renewed confidence from customers and the market, and this allowed us to proceed immediately with these three financial operations today," he said on a conference call. "They will help the company manage its own destiny and restore competitiveness."
Despite seeing ongoing losses, the vendor reported that in the third quarter its IP division revenues rose 7 percent year-over-year to $789.2 million, while the Fixed Networks division revenues were $735 million, up 0.7 percent year-over-year.
For more:
- The New York Times via Reuters has this article
Earnings summary: Wireline telecom earnings in the third quarter of 2013
Related articles:
Alcatel-Lucent's Q3 IP revenues jump 7 percent to $789.2M
Alcatel-Lucent's IP division revenues rise 25 percent to $824M
Alcatel-Lucent's Shift strategy centers on cloud, software
Alcatel-Lucent's new CEO faces cash flow challenge