STOCKS NEWS EUROPE-Alcatel-Lucent falls on capital hike
Shares in Alcatel (Paris: FR0000130007 - news) -Lucent drop 5 percent, trimming recent lofty gains, after the telecom gear maker says it will launch a 955 million euro ($1.29 billion) capital increase and a $750 million high-yield bond to shore up its balance sheet.
"The market knew that Alcatel was going to make a capital increase at some point, but the timing is clearly ahead of what was expected, though the amount raised is in line. At the very first glance, we calculate a 15 percent dilution," a Paris-based trader says.
The trader adds that the capital increase could be seen as a sign that Alcatel will not sell its wireless division to Nokia (Stockholm: NOKI-SEK.ST - news) .
"The CEO was saying recently that we had to expect a capital increase unless the company could sell more assets than its current 1 billion euro disposals plan," the trader says.
Shares in Nokia are up 1.7 percent.
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Reuters Messaging: blaise.robinson.thomsonreuters.com@reuters.net