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Feb 08, 2013 05:02 PM IST | Source: ft.com

Alcatel-Lucent CEO Verwaayen to step down

Ben Verwaayen, the chief executive of Alcatel-Lucent, is to step down from his post in May after failing in his attempt to turn round the fortunes of the ailing telecoms equipment maker.


Ben Verwaayen, the chief executive of Alcatel-Lucent, is to step down from his post in May after failing in his attempt to turn round the fortunes of the ailing telecoms equipment maker.


The departure of the Dutchman, a former chief executive of BT, follows more than a year of speculation about whether he would carry on in the job.


The decision was made during a board meeting on Wednesday ahead of the publication of the group's fourth-quarter results. Alcatel said on Thursday that it made a net loss of ?1.2bn in the last three months of 2012.


The company has struggled since it was created from the poorly executed merger of France's Alcatel and Lucent of the US in 2006.


Philippe Camus, Alcatel's chairman, said the board had started a search for a new chief executive, who would take over after the annual meeting in May.


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Mr Verwaayen said: "It was clear to me that now is an appropriate moment for the board to seek fresh leadership to take the company forward."


He had set himself a three-year target of making Alcatel a "normal" company when he became chief executive in 2008. But Alcatel's difficulties have worsened recently because of reduced spending by telecoms operators, and intense pricing competition from Asian rivals, such as Huawei and ZTE.


The group's high level of cash burn has also alarmed investors. It said on Thursday that free cash flow was a positive ?355m in the fourth quarter, but was still a negative ?679m for the year.


Alcatel shares have fallen 70 per cent over the past five years and it was forced to leave the CAC 40 index of France's leading companies in December.

The company has been driven to secure about ?2bn of loan financing, underwritten by Credit Suisse and Goldman Sachs, which is secured by its large portfolio of intellectual property. The deal has raised the hackles of the French government, which is also angry about the company's plan to cut 5,500 jobs.

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