) recently procured a new credit facility with extended maturity
to refinance its earlier credit facilities signed in 2007. This
comprises a revolving credit facility with a borrowing capacity
of $2 billion.
However, with this flexible financing tool, Ericsson will also
be able to serve its objective of delaying the loan repayments,
thereby extending the maturity. The new credit facility has
tenure of five years, with two available extension options of one
year each. An aggregate of 18 banks have provided the credit
HSBC Holdings plc
Nordea Bank acting as coordinators.
Ericsson develops and manufactures products for wired and
mobile communications in public and private networks. The company
produces mobile telephones through its Sony Ericsson joint
venture. Ericsson manufactures and installs wired and wireless
communications systems, wireless microwave links, call center
equipment, microelectronics, and radar systems.
In first quarter 2013, Ericsson had a negative cash flow of
SEK -3.00 billion ($0.47 billion) from operations, primarily
resulting from increased working capital requirements for
restructuring. Cash outlays for restructuring amounted to SEK 0.3
billion ($0.04 billion). Trade payables increased by SEK 3
million totaling to SEK 23 million as on Mar 31, 2013. With the
new credit facility, Ericsson has increased its liquidity and
management intends to use this credit for general corporate
Ericsson currently has a Zacks Rank #3 (Hold). Other players
operating in the same sector are
Ubiquiti Networks Inc.
), with Zacks Rank #1 (Strong Buy) and
Mitel Networks Corporation
) with Zacks Rank #2 (Buy).
ERICSSON LM ADR (ERIC): Free Stock Analysis
HSBC HOLDINGS (HBC): Free Stock Analysis
MITEL NETWORKS (MITL): Free Stock Analysis
UBIQUITI NETWRK (UBNT): Free Stock Analysis
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