NSN sell shares fail Nokia and Siemens or increase investment

Sina Science and technology news Beijing time of June 27, according to foreign media reports, Nokia and Siemens failed to both sides of the joint venture Nokia Siemens Communications Company (hereinafter referred to as "NSN") to find new investors. Neither Nokia nor Siemens commented on the news. Two companies are likely to invest more in NSN, the report said.　　Earlier, Nokia and Siemens tried to sell a stake in NSN to a consortium including private-equity firms Gores Group and Platinum Equity, but the deal could not succeed. "Any potential investor will ultimately need to see the prospect of NSN profitability," said Earl Lum, head of EJL Wireless, a telecoms equipment industry research firm. Since 2007, NSN has been profitable for only two quarters. So we don't think investors will be satisfied with the current valuations that Nokia and Siemens are setting for NSN. "Nokia and Siemens merged their telecommunications equipment business in 2007 and signed a 6-year cooperation agreement in the hope of obtaining double-digit gross profit margins in a short period of time," he said. However, NSN has long been facing a profit dilemma.　　Nokia and Siemens each own 50% per cent of the NSN, but Nokia has 4 board seats in the company. NSN a nearly 1 billion-dollar loss last year, so Nokia's performance will improve significantly if it is able to sell NSN's controlling stake.　　The report said Siemens was disappointed that Nokia could not find a solution, and Siemens could try to gain NSN's dominance. The private-equity firm KKR and TPG are still likely to conclude deals with Nokia and Siemens to acquire a small stake in NSN. The Financial Times reported earlier this month that the two private-equity firms would not bid for NSN shares because of a failure to agree on the price and control over the company. Earlier this month, Nokia also said it was negotiating with "multiple parties" on the sale of its NSN shares. (D-Gold)