According to Reuters, Alcatel-Lucent (NYSE: ALU) has planned to pursue an initial public offering of shares for its submarine cable business in the first half of 2015, ending a string of rumors about the future of the division that's been suffering from weakening demand.
The IPO of the submarine cable business is part of its overall drive to exit what it says are low-growth businesses. If the IPO does go through, Alcatel-Lucent would maintain a majority stake in the business, while the IPO would provide resources to expand the business further into the oil and gas market.
Set to take place in the first half of 2015, Alcatel-Lucent said the IPO was designed to "increase its visibility and to optimize capital allocation."
Rumors about the fate of the submarine cable business have been swirling for over a year. In Nov. 2012, Reuters reported that Alcatel-Lucent had planned to sell its submarine cable business, which caught the attention of France's sovereign fund (FSI), and FSI was going to make a bid to purchase Alcatel-Lucent's submarine cable unit.
In 2014, Alcatel-Lucent's submarine business completed a field trial with Apollo, setting what it claims to be a new capacity record of 7.2 terabits per second on a transatlantic system connecting France to the United States. Alcatel-Lucent Submarine Networks (ASN) won a significant new cable project, SEA-ME-WE5. and started to construct the Seabras-1 connecting Brazil and the US. Furthermore, it is also said ASN is trying to initiate a new submarine cable connecting Asia and the US with an innovative funding model. All these achievements and projects will add value to the planned IPO of Alcatel-Lucent Submarine Cable Networks.