In an interview with Reuters, Chief Executive Ben Verwaayen said the loan from Credit Suisse and Goldman Sachs, under which the group's 29,000 patents and US business will be put up as collateral, would give him more time to deliver a promised turnaround.
"The balance sheet had started to be a concern, and a certain perception of fragility took hold," he acknowledged.
"Once that becomes part of the conversation, you have to take action immediately and create certainty. We needed something practical, implementable, and fast, and that's what we've done."
Verwaayen dismissed concerns raised by the French finance ministry on December 17 and Alcatel unions on December 18 that the financing deal amounted to mortgaging the group's future by saying that it would retain full ownership of its assets, including the patents.
"We would first have to go into default before anything happens and we have no plans to go into default," he said, adding that he was open to government proposals if it had a better solution to suggest.
The financing deal is the latest move by the Dutch executive as he seeks to prove Alcatel-Lucent can prosper amid tough competition from low-cost Chinese rivals like Huawei and a constant squeeze from cash-strapped telecom operators seeking to reduce expenses.
The group also plans to cut 1.25 billion euros in costs by the end of 2013 via 5,500 layoffs and exiting unprofitable countries and contracts to staunch an average annual cash burn of 700 million euros in the past five years.
Verwaayen did not rule out further cost cuts, and dismissed the charge that Alcatel-Lucent's move to trim 7 percent of 76,000 staff fell short of rival Nokia-Seimens Networks cutting nearly a quarter of staff.
"We could be even more aggressive on cost cuts, but you cannot break the company," he said, adding that the programme would reduce fixed costs by 20 percent. With financing and cost cuts underway, Verwaayen still faces big challenges to deliver on a promise made upon his arrival in September 2008 to make Alcatel-Lucent a "normal company" with regular profit and healthy cash flows.
"I wouldn't be here if I didn't think we could get there," said Verwaayen.
Much will depend on whether the telecom gear market recovers from a tough 2012 in which it contracted because Chinese operators - hit by a mobile technology switch - spent less and the recession affected European carriers.