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Lucent settles shareowner suits for $315m

Telecommunications technology supplier Lucent Technologies has reached an agreement to settle all pending shareowner lawsuits against it without admitting any wrongdoing.

The deal, subject to final court approval, would settle 54 suits by shareowners and other plaintiffs that allege the company, 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 US 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 $315m (£202m) in common stock, cash or a combination of both, at the company's discretion, according to the statement.

The company 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.

Lucent estimated the fair value of those shares at about $100m (£64m).

The company expects to record a related charge of $420m (£269m) in the second quarter of its 2003 financial year. The amount of the charge may change depending on recovery from insurance and the value of the warrants.


 

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