Fully-Committed Euro 1.615 billion senior secured credit facilities underwritten by Credit Suisse AG and Goldman Sachs Bank USA
Provides Stabilization and Enhances Alcatel-Lucent's liquidity profile
Loan Facility provides flexibility to optimize its business and capital structure in conjunction with the previously announced Performance Program which is underway (€1,250 mm in cost reductions expected by year-end 2013)
Paris, December 14, 2012 - Alcatel-Lucent (Euronext Paris and NYSE: ALU) today announced it entered into commitments with Credit Suisse AG and Goldman Sachs Bank USA for Euro 1.615 billion in senior secured credit facilities.
Commenting on the initiatives, Ben Verwaayen, CEO Alcatel-Lucent, said: "Today's announcement of a multi-year financing commitment allows Alcatel-Lucent to operate and adapt our business in a manner which is appropriate in today's markets. The proceeds from the new financing will be used to effectively extend our maturity profile over the next several years and provide additional flexibility to finalize our previously announced Performance Program priorities, including the Euro 1.25 billion cost reduction target and the exiting or restructuring of unprofitable Managed Services contracts and geographic markets. We will take advantage of the flexibility provided by this new financing in order to aggressively look at all options to drive long-term sustainable profitability, enhance our strategic positioning and improve our balance sheet."
It is expected that Alcatel-Lucent USA, an Alcatel-Lucent subsidiary, will be the borrower and Alcatel-Lucent and some of its material subsidiaries will be guarantors. The senior secured credit facilities, as contemplated, are expected to be denominated in U.S. dollars and in euros, and will have maturities of three and a half to six years. It is expected that the facilities will be secured by, among other things, the intellectual property portfolio of Alcatel-Lucent.
The commitment parties have the right to syndicate all or a portion of their respective commitments with respect to the financing but may not assign their obligation to fund. Certain terms of the financing are subject to change in connection with such syndication, targeted to complete in January 2013 The commitment is subject to customary closing conditions including the negotiation of definitive documentation regarding the financing and there not having occurred any material adverse change in our business.
Information Shared with Lenders
Certain important information, including about the company, being shared with the lenders is available on the company's website at http://www.alcatel-lucent.com/lidec12 under the heading "2012 Lender Information." In materials provided to lenders Alcatel-Lucent targets for 2015 a gross margin in the range of 35% to 37% and an adjusted operating margin of 6% to 9%.
"Gross margin" is the sales price less cost of goods sold. "Adjusted" refers to the fact that it excludes the main impacts from Lucent's purchase price allocation.