Nokia to shell EUR355 million to India to transfer its domestic unit to Microsoft - sources
According to two sources who were familiar with the matter, Nokia Oyj is set to pay at least EUR355 million or USD487 million to tax authorities in India in order to facilitate the transfer of its local unit to Microsoft Corp.
Nokia initially announced that it will be putting EUR85 million upfront for the state of India to allow the company to shift its assets including its Chennai-based manufacturing plant, but was said to have the capacity to pay EUR270 millon more, said the sources. The sources refused to be named as Nokia's offer was private matter.
In September, Nokia's asstes in India were frozen due to a tax dispute. The month before, Nokia entered into a definitive agreement to sell its mobile phone business to the company founded by Bill Gates in a EUR5.44 billion transaction for the former to focus on its network-equipment business. The sources disclosed that should the freeze order was not lifted, Nokia could resort to finding a new buyer. The Indian assets are purportedly part of the handset unit Nokia had agreed to sell to Microsoft.
The sources added that Nokia remained committed to lift the freeze order on its assets and had urged the government of India and the its tax agency for a solution to expedite the asset freeze and transfer process. Bloomberg said in its report that the Delhi High Court will be deciding on the status of Nokia's assets at a hearing that will be held today.
Finland-based Nokia has said the government of India had ordered the company to pay around INR20.8 billion or USD342 million in taxes missing from businesses with Indian unit Espoo.
In trading yesterday, Nokia saw its shares increase 3.2% to EUR5.91 per share in Helsinki. The company saw its valuation doubled this year despite its struggle to compete with bigger smartphone rivals, recording a valuation of EUR22.1 billion.
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