Jun 7, 2002 : Nortel Raises $1.49 Billion: Report
📅 - Telecommunications equipment manufacturer Nortel Networks (nortelnetworks.com) raised $1.49 billion from common stock and convertible securities offerings on Thursday in an effort to build cash to help it through a slumping demand for telecommunications equipment, Reuters reported Friday.
The company had planned to raise about $800 million, but boosted the offerings by 86 percent, generating almost double that amount. Nortel's shares have fallen 89 percent to $1.41 in the past year, down 32 percent since Monday, when the company made plans for the offering.
The most recent drop was due, in part, to the fact that the new offerings dilute existing Nortel shares, which some investors sold "short."
According to the Reuters report, analyst opinion places Nortel Networks in the precarious position between diluting shareholders, demonstrating a bit of desperation in the process, or not diluting the shares and quite possibly running out of money.
Nortel said, while planning the offering, that it plans to use the proceeds to fund its general corporate operation.
The company raised $776 million by offering 550 million shares at $1.41 each, said the report. The company also raised $714 million by selling securities convertible into Nortel shares in three years at $1.69, 20 percent above the stock's Thursday closing price.
Shares in Nortel fell 19 cents, almost 12 percent, in trading on the New York Stock Exchange on Thursday, and opened trading on Friday by climbing slightly.
The company had planned to raise about $800 million, but boosted the offerings by 86 percent, generating almost double that amount. Nortel's shares have fallen 89 percent to $1.41 in the past year, down 32 percent since Monday, when the company made plans for the offering.
The most recent drop was due, in part, to the fact that the new offerings dilute existing Nortel shares, which some investors sold "short."
According to the Reuters report, analyst opinion places Nortel Networks in the precarious position between diluting shareholders, demonstrating a bit of desperation in the process, or not diluting the shares and quite possibly running out of money.
Nortel said, while planning the offering, that it plans to use the proceeds to fund its general corporate operation.
The company raised $776 million by offering 550 million shares at $1.41 each, said the report. The company also raised $714 million by selling securities convertible into Nortel shares in three years at $1.69, 20 percent above the stock's Thursday closing price.
Shares in Nortel fell 19 cents, almost 12 percent, in trading on the New York Stock Exchange on Thursday, and opened trading on Friday by climbing slightly.
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URL source: http://www.thewhir.com/marketwatch/nor060702.cfm
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