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Nokia Buyout Shares of Siemens AG Strains Budget

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July 2
10:06 PM 2013

Nokia expects cash strain in the coming days as it continues to buyout Siemens AG for its share of the network equipment joint venture that was established between the two companies.

With the €1.7 billion price tag that was set by Nokia to gain full control of the Nokia Siemens Network, strains in the budget are expected. Experts are saying that the deal is cheaper than expected.

Experts are saying that the cyclical business is not profitable enough for the network giant to cover its losses, which leave many wondering if Nokia can turn the business around soon.

Pohjola analyst Hannu Rauhala said, "If they constantly have to be worried about the cash position, it restricts their ability to move, to react to changes in the market."

Analysts from Canadian bank Canaccord are taking note of Nokia's current cash bum. Bank of America Merrill Lynch experts also mentioned that at the suggested rate that Nokia is in, the company could be in debt in only four quarters.

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