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Lucent to sell 2 plants
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May 10, 2001: 2:59 p.m. ET
Flextronics appears to be likely buyer; price reportedly could be $600M-$900M
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NEW YORK (CNNfn) - Lucent Technologies Inc. confirmed Thursday that it has received several bids for two manufacturing plants.
Lucent (LU: up $0.05 to $10.20, Research, Estimates) plans to sell a manufacturing site in Oklahoma City that employs 4,000 workers and one in Columbus, Ohio, that has 5,300 employees. The company plans to make a decision by early this summer and complete the transactions by Sept. 30, a spokesman said.
Press reports said the sale could raise between $600 million and $900 million. Flextronics International Ltd. (FLEX: down $1.73 to $26.75, Research, Estimates), a Singapore contract manufacturer, is emerging as the most likely buyer of the two sites, beating out rivals Solectron Corp. (SLR: down $0.73 to $25.42, Research, Estimates), Jabil Circuit Inc. (JBL: down $0.41 to $31.59, Research, Estimates), and Celestica Inc. (CLS: down $1.08 to $53.55, Research, Estimates), the Wall Street Journal reported.
The Oklahoma plant makes switching equipment while the one in Columbus develops wireless products. Both have been on the block since January but a deal is expected to be completed in four to six weeks. A sticking point in the negotiations is who will own the inventory at the plants, the WSJ said.
Neither Lucent nor Flextronics would comment.
The Murray Hill, N.J.-based telecommunications maker is seeking to raise cash to pay off its debts.
Lucent reported a second-quarter pro forma loss of $1.26 billion, or 37 cents a share, excluding special items. That compares with pro forma earnings of $509 million, or 16 cents a share, in the year-earlier period. Analysts surveyed by earnings tracker First Call had been looking for a loss of 23 cents a share in the most recent period.
Second-quarter results exclude a $2.7 billion restructuring charge related to eliminating 2,000 jobs out of 10,000 planned under the cost-cutting effort announced earlier this year,
The company also has been hit by accounting questions including how it could lend hundreds of millions of dollars to one of its largest customers, Winstar Communications Inc., in order to help it buy its products. Winstar filed for bankruptcy court protection April 18, suing Lucent for $10 billion the same day, charging it with breach of contract, a charge Lucent officials deny.
Lucent also plans to sell its optical fiber unit, which could fetch between $8 billion and $10 billion, press reports said. The unit employs about 6,300 people and designs and makes optical fiber, fiber cable and specialty fiber components for the telecommunications industry. 
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