Nokia Siemens Networks data networking and telecommunications equipment joint venture of Nokia (OMXH: NOK1V) and Siemens AG has really started to try to solve its capital issues. Investors in Nokia and Siemens have been worried that the parent companies would again need to inject capital on top of the one billion that Nokia and Siemens were forced to cough up after failing to find takers for Siemens’ portion of the company. NSN has been loss-making since its initiation in 2007.
Last week the CEO of the company announced that NSN plans to slash 17 000 jobs (nearly a quarter of the company’s total work force) by 2013, a number that far exceeded market expectations, in connection with its strategy update. NSN will focus on mobile broadband infrastructure and services. The restructuring program aims to cut costs by 1 billion Euro annually from 2013 on.
Head of German works council Gearg Nassauer said to Bloomberg, that NSN is turning itself into a takeover candidate and needs new management. Copy of CEO Rajeev Suri’s letter to NSN employees attained by Reuters said that Nokia and Siemens have provided capital "for the last time" and expects that results will now be seen. Suri went on to state that many businesses and regions have been cash flow negative since the beginning and continue to pile on losses.
NSN started shedding some of those businesses this week, as it announced the sale of former Motorola Solutions’ WiMAX business to NewNet Communication Technologies, LLC, a Skyview Capital, LLC portfolio company. Earlier markets were whispering that NSN is seeking a 1.5 billion Euro forward-starting loan to be able to renew existing credit agreements set to mature in 2012.
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