Lucent closer to selling fiber unit to Furukawa

NEW YORK: Lucent Technologies Inc., moving to raise cash and restructure its

business, is near a deal to sell its fiber unit to Furukawa Electric Co. of

Japan for $2.75 billion, the Wall Street Journal reported in its online

edition on Monday.

Citing people familiar with the matter, the newspaper said should a deal be

reached, it would end five months of highly scrutinized negotiations over the

fate of the business, Optical Fiber Solutions, whose sale is crucial to Lucent's

broad restructuring plan led by chief executive Henry Schacht.

Lucent needs to close the sale by September 30 to spin off the remaining

portion of Agere Systems Inc., its microelectronics unit, the newspaper said.

Lucent is under the gun to raise $2 billion in nonoperating cash to complete the

spinoff, as required by banks that lined up $4 billion in credit for the company

earlier this year, the paper reported.

The fiber sale is likely to be viewed favorably by credit agencies, which

have grown concerned about Lucent's cash flow and recently downgraded Lucent's

debt rating to junk status, the newspaper said.

Exiting the capital-intensive fiber business, based in Norcross, Ga., would

cut about 6,000 employees from the company's rolls, another objective, as Lucent

tries to adjust to a shrinking market for telecommunications equipment, the

paper said. "Negotiations to sell the business are moving apace,"

Lucent spokeswoman Kathleen Fitzgerald told the paper.

(C) Reuters Limited 2001.