Lucent Technologies moves forward with restructuring
Aug. 17, 2001--Lucent Technologies announced it has received the consent of its bank group to amend its credit facilities and is now swiftly moving forward with its Phase II business restructuring program.
Lucent Technologies (NYSE: LU) announced it has received the consent of its bank group to amend its credit facilities and is now swiftly moving forward with its Phase II business restructuring program. The amendments include changes to the financial covenants that will allow Lucent to record the business restructuring and other charges it needs for its Phase II program, and changes to the condition to spin Agere.
The most significant changes to the financial covenants include new levels for the EBITDA (or earnings before interest, taxes, depreciation and amortization) and Net Worth covenants and changes in how these covenants are calculated.
Changes to the conditions to spin Agere include:
* A requirement to achieve positive EBITDA, as defined in the agreements, for the fiscal quarter prior to the spin; and
* Increasing the total amount of cash that Lucent needs to raise to complete the spin from $2.5 billion to $5 billion, and broadening the definition of the type of cash-raising actions that qualify for this condition. The company is on track to meet this condition through the multiple financing actions it has recently completed and others it expects to complete.
In addition, the company continues to move forward with its intention to spin off Agere Systems and expects the spin to be delayed up to six months from the original September 30, 2001 timeframe.
On July 24, 2001, Lucent announced that its Board of Directors has discontinued payment of cash dividends on its common stock. Under the credit facilities amendments, Lucent cannot resume payment of dividends on its common stock unless certain credit ratings or EBITDA levels are achieved.
Lucent is filing a copy of the amendment in a Form 8K with the Securities and Exchange Commission.
About Lucent Technologies:
Lucent Technologies, headquartered in Murray Hill, N.J., USA, designs and delivers networks for communications service providers. For more information, visit www.lucent.com.