Ikanos Communications Announces Financing Plan

FREMONT, CA--(Marketwired - Sep 29, 2014) - Ikanos Communications, Inc. (NASDAQ: IKAN), a provider of advanced broadband semiconductor and software products for the connected home, today announced that the company's largest investor, Tallwood Venture Capital (Tallwood), and Alcatel-Lucent (EURONEXT PARIS: ALU) (NYSE: ALU) are purchasing $11.25 million and $5.0 million, or approximately 27.4 million and 12.2 million shares, of the company's common stock, respectively, at $0.41 per share for aggregate gross proceeds of $16.25 million, and Alcatel-Lucent has committed to loan the company up to $10.0 million, subject to the terms of the loan agreement. In addition, Tallwood has agreed to purchase an additional $11.25 million of common stock at the same per share price (the Standby Agreement). Alcatel-Lucent has entered into a collaboration with Ikanos on the development of ultra-broadband products. 

In order to offer the company's other stockholders the same ability as Tallwood to purchase shares of the company's common stock at the same price, the company has determined to register a public offering (the Rights Offering) of approximately 144.9 million shares of common stock. Pursuant to the Rights Offering, each stockholder of record on September 26, 2014 will be entitled to purchase shares of common stock and, if a stockholder purchases its pro rata share of the Rights Offering (the Base Offering) and all shares subject to the Rights Offering are not purchased by other stockholders, the stockholder will have an over-allotment option. Tallwood has indicated its intention to purchase, between its initial purchase of $11.25 million in the private placement, and the Base Offering, an aggregate of $22.5 million of common stock and will be deemed to be eligible to participate in the over-allotment option. Subject to the over-allotment option available to all stockholders, including Tallwood, and to Alcatel-Lucent's purchase of $5.0 million of common stock in the private placement, any stockholder purchasing its pro rata share in the Base Offering will not be diluted by virtue of Tallwood's purchase of common stock. To make the Rights Offering possible, the company will seek stockholder approval to authorize 225 million additional shares of common stock.