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Nokia to raise E750M in bond issue

Tuesday, October 23 08:33:38

Mobile phone maker Nokia plans to raise 750 million euros ($980 million) by issuing convertible bonds to bolster its cash position as it battles to claw back market share lost to Apple and Samsung. Once the world's biggest mobile phone maker, the Finnish firm has fallen behind Apple's iPhone and Samsung's Galaxy phones in the lucrative smartphone market, and is pinning its hopes for recovery on new models that go on sale next month.

With its net cash falling to 3.6 billion euros from 4.2 billion in June, and its debt ratings lowered to junk over the past year, analysts have said the company needs to show a turnaround in the next several months if it is to survive. Nokia finished the third quarter with 3.8 billion euros in interest-bearing liabilities. It also owns half of network equipment venture Nokia Siemens Networks, which finished the quarter with 1.4 billion euros in liabilities.

The bonds, due 2017 and convertible into ordinary shares, will carry a coupon between 4.25 percent and 5.00 percent, the company said on Tuesday. The initial conversion price is due to be set 28-33 percent above the average price of the Nokia shares between the launch and pricing of the offering. The final terms, including the conversion price and maximum number of shares which may be issued upon conversion, are due to be announced later in the day. Nokia shares were down 5.2 percent at 2.048 euros in early trade. ( C) Reuters