Telecommunications technology vendor Lucent Technologies Inc. has reached an agreement to settle all pending shareowner lawsuits against it without admitting any wrongdoing, the company said in a statement Thursday.
The deal, subject to final court approval, would settle 54 suits by shareowners and other plaintiffs that allege the company and current and former executives and officers violated federal securities laws and related state laws.
Lucent has been hit hard by the downturn in the telecommunications business over the past few years. Last month, a U.S. Securities and Exchange Commission investigation into the company's accounting practices ended with an agreement under which Lucent did not have to pay any fines or penalties or make any financial restatements.
Lucent agreed to pay US$315 million in common stock, cash or a combination of both, at the company's discretion, according to the Thursday statement. It will try to recover part of this from its insurance carriers. In addition, the company will issue 200 million warrants to purchase shares of common stock at a strike price of $2.75 with a three-year expiration from the date of issue, the statement said. Lucent estimates the current fair value of those shares at about $100 million.
The company expects to record a related charge of $420 million, or $0.11 per share, in the second quarter of its 2003 fiscal year. The amount of the charge may change depending on recovery from insurance and the value of the warrants.
Avaya Inc., a network equipment maker that was spun off from Lucent, is responsible for a portion of the settlement that is still being determined.
Lucent does not expect to distribute any proceeds from the settlement until some time in its 2004 fiscal year.