Lucent Technologies Inc. plans to sell about $1.3 billion in convertible senior notes as part of the company’s strategy to wade out of its short- and medium-term debts.
“This offering is part of our overall effort to strengthen the balance sheet and will provide us with added flexibility to retire or satisfy certain debt, preferred stock and other obligations at significantly lower interest rates,” said Chairman and Chief Executive Officer Patricia Russo.
The company also announced it obtained $595 million of new senior secured credit facilities, which will allow the company to “issue $245 million in new letters of credit, renew up to $350 million of existing letters of credit and secure certain other obligations.”
Lucent is not alone in a trend to raise money this way, as Siemens AG, L.M. Ericsson and Juniper have recently made such moves. Juniper sold $300 million of convertibles.
Lucent said Citigroup Global Markets and JP Morgan will manage the offering, as well as HSBC.
The wireless vendor has undergone a series of restructuring efforts during the past two years, including pruning its staff by more than half, cutting other costs and focusing on its core competencies.
The company’s last quarterly report indicated it might have stopped its bleeding and could move to profitability by the end of this year.
Lucent also introduced UMTS software to enable mobile operators to provide services at speeds of up to 384 kilobits per second, comparable to DSL and cable modem services.
“Our latest commercial UMTS/W-CDMA software release is focused on the enterprise and small or home office markets and delivers all of the critical features that UMTS/W-CDMA operators are looking for as they begin to roll out commercial data services, including a number of unique security and provisioning features specifically designed to address the needs of enterprise customers,” said Roger Derrien, vice president for UMTS product management with Lucent Mobility Solutions group.
In addition, in what Lucent describes as its largest recent operations support systems contract, the supplier said it will deploy its Net Minder software and Navis Network Fault Management upgrades as part of the solution to manage China Unicom’s long-haul switch network.
“The end result for China Unicom will be improved capacity, more reliable service and improved revenues,” said Lucent.
