The French government is considering picking up a stake in network equipment maker Alcatel Lucent SA (ADR)(NYSE:ALU) in order to assist the loss-making company and turn it around.
In a report Bloomberg said that taking a minority stake in the company was one of the options being explored by France.
“Such a move would give France more influence at the company after a 2 billion-euro ($2.6 billion) financing deal criticized by officials,” the report said, quoting sources.
Las December the government had announced the loan which was underwritten by Credit Suisse and Goldman Sachs. The move had been criticised as throwing good money after bad.
Other options being considered for the revival of Alcatel-Lucent include a merger between the company and rival Nokia Siemens Networks or an investment in its undersea cable business, the report added.
But before it can do all that, a successor has to be found for Chie Executive Ben Verwaayen, has said that he will step down from the company as its head once a replacement has been found.
A three-year turnaround plan for the company has been unsuccessful in its goal of making the company profitable.
Shares in Alcatel-Lucent fell 1.6 percent to close at 1.14 euros in Paris on Thursday, paring losses after an earlier decline of as much as 6.1 percent.
A government investment in Alcatel-Lucent would be a new chapter in the history of a onetime French industrial giant, with former operations ranging from spaceflight to cutting-edge theoretical physics, that’s been weakened by Asian competition and slower spending on network equipment by mobile carriers, Bloomberg said.
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It is great time of uncertainty for ALU. I still own few shares of it. Have no idea what to do with it.
what is the enterce price you got? if you’ve just purchsed them, they worth gold – having a huge potential.
Not sure about “worth gold” comment, as their main bread winner was and still is cell equipment. Carriers in the past have known to just “change” manufacturer rather than upgrading existing. But good luck!