Paris-based Alcatel-Lucent (NYSE: ALU ) is looking for money in all sorts of places. With $3.2 billion in generally accepted accounting principles losses reported over the past 12 months, and more than $570 million in negative free cash flow, the company needs a cash infusion to keep its business running until the economy turns around and it can begin generating cash on its own.
And so, the telecom equipment maker announced Monday a three-pronged approach to raising the cash it needs to remain in business:
- First, Alcatel will float between 454,722,512 and 460,000,000 new shares (approximately one for every five shares now outstanding) at a share price of €2.10, or approximately $2.84 apiece. This equates to a maximum capital raise from new shares of $1.3 billion.
- Second, Alcatel will take on $750 million in new debt by selling an equivalent value of high-yield bonds.
- Third and finally, Alcatel said it intends to avail itself of a new syndicated revolving credit facility worth up to €500 million -- giving it access to another $675 million worth of debt.
Shares will be sold only to existing shareholders -- up to eight new shares for every 41 shares of common stock currently held. Existing shareholders will receive "rights" to buy their additional shares on Nov. 19. They can exercise these rights through Nov. 29, after which date these rights will expire.
U.S. shareholders of Alcatel stock will not be permitted to buy new shares under the rights issue. However, U.S. owners of Alcatel American Depositary Shares, as Alcatel common stock usually trades in the U.S., can expect that their rights will be sold on their behalf on Euronext Paris before they lapse.