DOW JONES NEWSWIRES 
 

Finisar Corp. (FNSR) said it has launched separate exchange offers to swap common stock and cash at a steep discount for up to $95 million of two series of notes as it looks to reduce its debt.

Separately, the company announced the sale of its network tools division to JDS Uniphase Inc. (JDSU) for about $40.6 million. Part of the proceeds will be used to pay the cash portion of the exchange offers. It expects the deal to close Wednesday.

Finisar's shares were recently up 8.5% at 50 cents in premarket trading. The stock is off 46% in the last month.

Broadband-product producers such as Finisar have been hurt as telecommunications operators slow purchases and reduce spending on information-technology products. Finisar has posted just one profitable quarter in the last two years, as write-downs have wiped away higher sales, which have been boosted by its acquisition of Optium Corp. last year.

"The recent Optium merger helped underscore the fact that we are primarily an optics company and that, for the network tools business to continue to grow and be successful, it needs to have a larger presence and a broader product line," Executive Chairman Jerry Rawls said.

Finisar will exchange cash and stock for up to $37.5 million, or 75%, of its 2.5% convertible subordinated notes due next year and up to $57.5 million, or 63%, of its 2.5% convertible senior subordinated notes due next year.

Holders will get between $700 and $750 in the modified Dutch auction procedure for each $1,000 of notes tendered. Payment will be $525 in cash and the rest in stock.

The offer expires Aug. 6 at 5 p.m. EDT.

-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353; kerry.benn@dowjones.com