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
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.