Nokia (NYSE:NOK) and Germany's Siemens will need to pump around $1.44 billion into their infrastructure joint venture Nokia Siemens Networks to move forward with a restructuring plan, according to a report in the German magazine Capital.
The report cited an unnamed source described as a "company insider" who said that there is "no other option" for the vendor. Nokia and Siemens said in July they abandoned attempts to sell a stake in Nokia Siemens to a private equity firm. The parent companies said they would instead recommit to NSN.
Nokia Siemens spokesman Ben Roome declined to comment on the report. However, he noted that the second quarter of 2011 was NSN's fourth consecutive quarter of sales growth. NSN posted a $160 million operating loss in the second quarter.
"With sales of €3.6 billion ($5.18 billion), we were up 20 percent since the same time one year ago (and 12.6 percent when you exclude the Motorola business we acquired)," he told FierceWireless. "We recognize that, as we said on July 13, along with ongoing efforts to generate cost savings, Nokia Siemens Networks plans to take further steps to improve the competitiveness of the company as a standalone entity. For example, we plan to drive further efficiency while strengthening the company's innovation capabilities in mobile broadband, services and customer experience management to drive and support customer roadmaps."
The Capital report noted that NSN's $2.8 billion credit lines expire in June 2012 and will need to be replaced. Siemens CFO Joe Kaeser has said that Siemens might consider tapping the high-yield bond market at some point in the future.
- see this Capital article (translated via Google Translate)
- see this Dow Jones Newswires article (sub. req.)
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