Alcatel-Lucent Weighs Sale of Patents to Increase Cash
Alcatel-Lucent SA (ALU), the French phone- equipment maker considering asset sales to bolster its finances, is weighing a disposal of some secondary patents as the company seeks ways out of a streak of quarterly losses and a shrinking cash pile, its chief financial officer said.
“We can look to monetize that portfolio through licensing, through limited sales if those patents aren’t part of our core and a few other things,” Paul Tufano said yesterday in an interview at a conference organized by Morgan Stanley in Barcelona. “We look at all of the above.”
Alcatel-Lucent, based in Paris, has almost 30,000 patents and 15,000 patent applications pending, Tufano said.
“It’s a broad variety of technologies that we cover,” he said. “It will be hard to find a company with as broad a patent portfolio as ours, so I think it’s very attractive and there’s a lot of interest and there could be a lot of interest from a lot of different sources.”
Chief Executive Officer Ben Verwaayen, in his fifth year in the job, is struggling to turn Alcatel-Lucent around as European phone companies spend less and Asian rivals add pressure. The more than 2 billion euros ($2.6 billion) of debt due over the next three years is hampering the former BT Group Plc (BT/A) CEO’s turnaround efforts as thousands of job cuts have failed to stem losses.
The shares added 0.8 percent to 84 cents at 9:06 a.m. in Paris. They have plummeted about 80 percent since Verwaayen took over in September 2008. The 60-year-old hasn’t reached his goal of making Alcatel-Lucent sustainably profitable, and this month reported a third-quarter loss of 146 million euros.
Verwaayen’s efforts to shore up cash flow included a licensing agreement announced in February, which the company expects will deliver several hundred million euros. Alcatel- Lucent hasn’t disclosed revenue from the contract.
The CEO had so far said that the company would not look to sell its patents, which include voice-recognition and video- conferencing technology.
Last quarter, Alcatel-Lucent consumed 360 million euros of cash. Its cash reserve has diminished by an average of 700 million euros a year since Verwaayen took over from former chiefs Patricia Russo and Serge Tchuruk, who oversaw the merger of Alcatel SA and Lucent Technologies Inc. in 2006.
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