Seeking Alpha

Nokia Siemens Networks reportedly plans to issue €700M worth of high-yield bonds in the...

Nokia Siemens Networks reportedly plans to issue €700M worth of high-yield bonds in the Spring to test investor interest in the company and assess the potential of a possible IPO. However, Nokia (NOK) and Siemens (S) have no plans to exit the telecom-equipment company, which has enjoyed a turnaround with three straight quarters of underlying profitability.
Comments (15)
  • farid Alsaati
    , contributor
    Comments (41) | Send Message
     
    Is it mean Nokia need money to run the business ?
    21 Jan 2013, 05:21 AM Reply Like
  • Kamminga
    , contributor
    Comments (186) | Send Message
     
    Of course they do, like everybody else. But depending on what they pay the banks compared with the coupon on the new bond issue, this may simply reduce their cost of finance. It will also mean their full $1.5b bank facility will be available to them for immediate needs. It'll be interesting to observe market interest.
    21 Jan 2013, 06:04 AM Reply Like
  • marvinsannes
    , contributor
    Comments (51) | Send Message
     
    I'll buy.
    21 Jan 2013, 06:46 AM Reply Like
  • minerscorner
    , contributor
    Comments (6) | Send Message
     
    Would the possible "networks" IPO be like a spinoff? Would NOK stockowners recieve shares of new entity?
    21 Jan 2013, 09:05 AM Reply Like
  • wiesje
    , contributor
    Comments (2418) | Send Message
     
    is the IPO unlocking the chain Siemens/Nokia , so that MSFT can buy Nokia ?
    hold on to yr Nokia shares.
    we are going to get 7 euro one way or the other.
    21 Jan 2013, 09:47 AM Reply Like
  • Michael McGlothlin
    , contributor
    Comment (1) | Send Message
     
    Last time I looked, S was Sprint, not Siemens..
    21 Jan 2013, 10:36 AM Reply Like
  • wiesje
    , contributor
    Comments (2418) | Send Message
     
    that's the JV network for the States between Nokia-Siemens and Sprint ? anyway that's what i thought.
    21 Jan 2013, 10:47 AM Reply Like
  • Eld
    , contributor
    Comments (378) | Send Message
     
    Hmmm. Seems Nokia needs cash.
    21 Jan 2013, 12:44 PM Reply Like
  • LumiaMan
    , contributor
    Comments (324) | Send Message
     
    who doesnt need cash?
    21 Jan 2013, 02:20 PM Reply Like
  • Eld
    , contributor
    Comments (378) | Send Message
     
    If you need new debt to pay your old debts, it means something is not going well; it looks like NSN needs cash to pay its coming $1bn debt maturing on June 2013
    21 Jan 2013, 02:41 PM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (1910) | Send Message
     
    Everyone knows their cash situation, and $1B is a substantial fraction of their cash. So instead of just paying in cash (which they could do) they preserve the cash and 'recycle' the debt. Makes sense to me.
    21 Jan 2013, 02:47 PM Reply Like
  • Eld
    , contributor
    Comments (378) | Send Message
     
    @ Seppo: but NSN is generating cash, and has $1bn net cash! Why would they need more money?

     

    I do not get NOK's point here. Nokia is trying by all means to raise cash in the past months, but they do not need cash according to their financials. This is what makes me think they actually forecast a bad situation that will imply more losses. Could it be more restructuring?
    21 Jan 2013, 03:24 PM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (1910) | Send Message
     
    @eld because, according to your numbers, paying the loan outright would completely deplete NSN's cash. Is it not better to refinance and keep some cash in the bank?

     

    I think they are simply being smart and cautious and protecting their back against any (predicted (as you are implying) and unforeseen setbacks/costs).
    21 Jan 2013, 03:36 PM Reply Like
  • CptPicard
    , contributor
    Comments (53) | Send Message
     
    I guess I need to remind some of the commenters here that NSN and Nokia are essentially two different companies, although Nokia and Siemens together own the operation. NSN has been looking really good business-wise recently, and I suspect the loan is to fund further expansion (remember, this has nothing to do with Nokia's balance sheet).

     

    Should NSN be listed independently, I suspect it would be very good for Nokia shareholders as well, simply from a valuation perspective. I just wish Nokia doesn't screw up its edge once again and sell its NSN stake for peanuts...
    21 Jan 2013, 01:28 PM Reply Like
  • Spencer Knight
    , contributor
    Comments (365) | Send Message
     
    The article answers the question of what they need the money for. NSN will "pay down existing bank debt and fund future investment." Seems like a good plan. Have to see how it unfolds. Perhaps a cleaner balance sheet and future growth prospects via expansion will open NSN up for a buyout.
    21 Jan 2013, 04:33 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|