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Report: Lucent to Sell Optical-Fiber Business
Associated Press
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MURRAY HILL, N.J. — Lucent Technologies may sell its highly profitable optical-fiber business to raise the billions of dollars that lenders have been hesitant to give the financially distressed communications equipment company.

A deal to sell the Georgia-based operation, the world's second-largest producer of fiber-optic cable behind Corning, could come as soon as next month, The Wall Street Journal reported Wednesday, citing people familiar with the matter.

A Lucent spokeswoman said Wednesday the company would not comment on the report, which follows last week's news that lenders have balked at giving Lucent a new $4 billion credit line and two debt rating agencies cut Lucent's credit rating to a notch above junk-bond status.

The company's Fiber Optical Solutions unit could be worth several times the division's annual sales of about $2 billion, according to analysts cited by the Journal.

However, it could be hard to fetch that type of price with the financial markets stricken by signs of a severe economic slowdown, especially in the telecommunications market.

At a time when Lucent's financial picture was dark and getting darker, the optical fiber unit logged 60 percent sales growth in the company's fiscal year ended Sept. 30.

It also was the company's only core service provider business to show increased sales in the final three months of 2000. The unit, based in Norcross, Ga., employs 6,000 people.

The Securities and Exchange Commission is investigating Lucent's accounting practices because it twice restated already-reported revenues last fall. Meanwhile, its stock has plummeted from a high of $84 in December 1999. In late morning trading on the New York Stock Exchange, Lucent was off 19 cents per share at $12.15.

Last month, Lucent announced plans to eliminate about 10,000 of its 123,000 jobs worldwide through layoffs and attrition, and to remove another 6,000 from its payroll by switching operations at two plants to contract manufacturers.

The moves are part of an effort to restore profitability after more than a year of missed earnings targets and other serious financial and management problems.

Lucent also plans to spin off Agere, a 16,500-worker unit that makes optical components and communications semiconductors, by the end of the summer after an initial public offering at the end of March. It will be based in Allentown, Pa.

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