Alcatel-Lucent to rejoin CAC 40 just before Christmas

As was widely anticipated, Alcatel-Lucent is to rejoin the French blue-chip index CAC 40 on Dec. 23 in a move that reflects the continuing recovery of the telecoms equipment manufacturer after several torrid years.

In a statement, the operator of the index NYSE Euronext said Alcatel-Lucent would replace STMicroelectronics in the index just ahead of Christmas, with the new divisor of the CAC 40 index to be published after close of business on Friday Dec. 20.

"Rejoining the CAC would give back visibility to the group and would give credence to the company's turnaround strategy," Frédéric Rozier, management advisor at Meeschaert Gestion Privée, told Reuters in late November.

Alcatel-Lucent also confirmed that its capital increase announced on Nov. 4 had been successful, with the final gross proceeds amounting to around €956.7 million ($1.3 billion). The purpose of the capital increase is to strengthen the company's balance sheet.

Alcatel-Lucent said in November it was seeking to raise around $2.7 billion in fresh capital via a combination of new shares and debt. The company also just announced that its wholly owned subsidiary, Alcatel-Lucent USA Inc., has priced an offer to sell $650 million of its 4.625 per cent senior notes due 2017 in an offering to qualified institutional buyers in the United States.

Alcatel-Lucent has been working on turning around its fortunes for several years with the latest restructuring plan, called the Shift Plan, unveiled by CEO Michel Combes in June.

Combes outlined further cost-cutting measures in a drive to become cash-flow positive by 2015, and also touted a new slimmed-down organisational structure that will see the company focus on three main segments in order to become a specialist in IP networking and ultra high-speed broadband.

The group plans to focus on high-growth areas such as LTE and high-speed broadband, and to lower fixed costs by more than 15 per cent, saving a total of €1 billion ($1.37 billion).

In October, the company also confirmed it would cut a further 10,000 jobs worldwide by 2015 as part of the Shift Plan, sparking massive protests in France.

For more:
- see this NYSE Euronext release
- see this WSJ article (sub. req.)
- see this Reuters article

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