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Lucent Secures $6.5 Billion in New Financing

February 24, 2001|Reuters

Lucent Technologies Inc. said it secured $6.5 billion in new financing that will provide the world's largest telecommunications equipment maker with extra money as it tries to restructure its operations and recover from massive losses. The funds might help Lucent avoid having its credit rating slashed to junk status, and provide it with the necessary cash to carry on for the rest of the year even as it posts additional losses, analysts said. Murray Hill, N.J.-based Lucent plans to cut costs, lay off about 10,000 workers, shed noncore businesses and reorganize to fix operational and managerial problems in 2000 that erased about 77% of its stock value. Lucent slashed its growth outlook several times last year, fell behind rivals in the key optical networking market and struggled with manufacturing constraints and declining demand for its traditional telephone equipment products. It recently disclosed it is cooperating with an accounting probe by the Securities and Exchange Commission. Shares of Lucent, which have under-performed the Standard & Poor's 500 index by 75% over the last year, fell 13 cents to $12.40 on the New York Stock Exchange.

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