Nokia Siemens Networks raises $1.6 billion to restructure
updated 11:30 pm EST, Mon January 23, 2012
Follows a $1.3 billion bailout last year
Troubled joint venture Nokia Siemens Networks has raised $1.6 billion from US and European banks as part of a restructuring and re-focusing of the company's telecommunications equipment business. It had originally sought $1.95 billion to help pay off a $2.6 billion debt caused in part by the cost of a large redundancy program, and was bailed out last year to the tune of $1.3 billion by its parent companies after they failed to sell the joint venture.
NSN is the second-largest mobile broadband and mobile telecom device manufacturer, but has struggled with debt and an increasingly competitive environment since being formed in 2007, Reuters reports. The global economic downturn of the last four years has further aggravated losses, prompting the company to announce in November that it would cut 17,000 jobs. The company has recently started producing modems and other end-user equipment for the first time.
The company has since said it will not look to the parent companies for further aid, but has most of its debt coming due later this year and needed to secure further financing. Banks involved are said to include JPMorgan, Citibank, Bank of America and at least two European banks.
Nokia Siemens Networks' biggest asset is its 2010 acquisition of the wireless network equipment division of Motorola, thus gaining many of its customers. Once the layoffs are completed, the company will have a workforce of about 57,000 worldwide.
