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Ascom cuts jobs and boosts capital

Ascom employees wait to know where the job cuts will fall Keystone

The Swiss technology firm, Ascom, has announced that it is cutting a further 450 jobs worldwide.

This content was published on November 12, 2003 - 15:06

Ascom also said it would be issuing 13.5 million new shares to strengthen its balance sheet and cut debt, as part of a drastic restructuring programme.

The company added that a capital increase of SFr74.25 million, already fully underwritten by a syndicate led by Credit Suisse First Boston, would strengthen its capital base.

Shareholders are to vote on the measure at an extraordinary general meeting on December 4.

Beda Moor, a spokesman for the Swiss metal workers and watchmakers union, welcomed the capital increase but criticised the high human price of the restructuring.

“It gives Ascom much greater room for decision-making,” said Moor, adding that one job was being lost for every SFr170,000 in extra capital.

New shares

If shareholders agree, the value of shares would be reduced in two stages to SFr5.50 from SFr10 and the number of shares would increase by 13.5 million to 36 million.

Each shareholder would receive one subscription right for each share held. Five subscription rights would entitle the holder to three new shares.

The new shares would be offered for subscription from December 8 to December 17, while rights would be tradeable on the Swiss exchange from December 8 to December 16.

In September, Ascom said it aimed to swing into the black in 2004 after it almost halved its first-half net loss to SFr57 million.

The Bern-based firm hopes to have net debt of around 100 million francs by the end of 2003, not including the capital increase.

Turnaround

The firm has launched a turnaround strategy to reduce losses and cut debt.

The 450 jobs cuts come on top of the 500 job losses announced in January. The company has a staff of 5,000 worldwide.

Spokeswoman Bettina Cohen said it was not yet known how many workers in Switzerland would lose their job.

Ascom also intends to halve its size and focus on services for voice and data communications, security solutions and revenue-collection systems.

swissinfo with agencies

Key facts

Ascom says it is cutting another 450 jobs worldwide.
It also announced a capital increase of SFr74.25 million.
The company will issue 13.5 million new shares to strengthen its balance sheet and cut debt.
Shareholders will vote on the measure on December 4.

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