Alcatel-Lucent may offload patents to raise cash

Alcatel-Lucent is weighing the sale of parts of its patent portfolio as a route to strengthen its battered finances. This comes after the company was reportedly seeking buyers for its submarine cable business and its enterprise telephony unit after reporting weaker sales and a wider net loss in the third quarter.


"We can look to monetise that [patent] portfolio through licensing, through limited sales if those patents aren't part of our core and a few other things," CFO Paul Tufano said Thursday at the Morgan Stanley Technology, Media & Telecom Conference in Barcelona, according to Bloomberg. "We look at all of the above."

"It's a broad variety of technologies that we cover," he said. "It will be hard to find a company with as broad a patent portfolio as ours, so I think it's very attractive and there's a lot of interest and there could be a lot of interest from a lot of different sources."

The vendor has almost 30,000 patents with another 15,000 patent applications pending. Tufano also indicated that the company was looking at measures with particular regard to the convertible debt due in 2015.

"We are doing the research (so) that it will provide the ability to take the liquidity issue off the table," he told the conference, according to Reuters. "Specifics are actively being worked right now."

Unnamed sources familiar with the matter told Reuters that the company is working with banks on several options, including guaranteeing the submarine cable business, patents or other assets to back the company's debt.

"They are looking to back it with a 'collateral package' which could include patents and submarine assets," one source told Reuters. "But we don't know if that will work because they have negative covenants on their debt and there are so many different contracts involved."

Alcatel-Lucent faces around €2.2 billion in debt repayments through to the end of 2015, with a major deadline on Jan. 1, 2015, according to analysts.

For more:
- see this Bloomberg article
- see this Reuters article

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