Michael Combes Begins Alcatel Make-Over
Alcatel-Lucent, a Telecom equipment manufacturer plans to focus on networking products and high speed broadband. By 2015, it aims to slim down with a billion euros in cost cuts. The move is to reverse seven years of consecutive losses.
Michael Combes, new chief executive officer of the company unveiled on Wednesday unspecified asset sales and Eur2 billion debt repayment by 2015. A further 2 billion debt reduction and issuing of new shares are also included in its plan
In early trade today, the shares of Alcatel has jumped more than 7% to a new year high,
Pierre Ferragu, analyst at Bernstein Research said that the plan is in the right direction. However, he thinks that some elements of it is not aggressive enough and thought the cost of savings could have gone forward in a strong competitive landscape.
Alcatel-Lucent was formed in a merger in 2006. It competes with Sweden's Ericsson, China's Huawei and Nokia Siemens Networks. However, from its merger, it was unable to post regular profits and produce cash.
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