Alcatel-Lucent (ALU) Revs Up Turnaround Attempt

NEW YORK (TheStreet) -- Alcatel-Lucent (ALU), in line with its plan to turn the floundering company around, will seek a new round of refinancing. The public offering of 955 million euros ($1.3 billion) of stock aims to strengthen its equity and provide greater financial flexibility, the French telecom company said in a statement.

The sale of around 460 million shares at 2.10 euros apiece is significantly discounted from the 2.90 euros the shares are currently trading at on the Euronext Paris exchange. The offering has not been made available to U.S. shareholders.

The Paris-based company also will launch a $750 million high-yield bond issuance and implement a new syndicated revolving credit facility worth 500 million euros.

After doubts over whether the company could spark a recovery, Alcatel-Lucent reported better-than-expected third-quarter financials on Thursday, sending shares soaring 16.1% on the New York Stock Exchange. The company managed to narrow losses to 200 million euros from 316 million euros a year earlier. Revenue of 3.67 billion euros ($5.05 billion) increased 7% year over year, driven by a 14% increase in North American sales.

Analysts surveyed by Thomson Reuters had expected a net loss of 139.4 million euros on revenue of 3.6 billion euros.

CEO Michel Combes has been making aggressive moves to turn the company around. By 2015, the phone equipment maker will have cut 10,000 jobs, saving 1 billion euros and reducing fixed costs by more than 15%.

In premarket trading Monday, shares were 0.51% lower to $3.87. 

TheStreet Ratings team rates Alcatel-Lucent as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about its recommendation:

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