Nokia Siemens sell-off fails to win over investors

Nokia and Siemens can’t find anyone interested in buying a controlling stake in their unprofitable joint venture.

According to the Wall Street Journal,  both outfits are thinking that they will have to start looking behind the back of the sofa to find pennies to pump more money into Nokia Siemens Networks.

Nokia and Siemens merged their telecom equipment businesses on a 50-50 basis in 2007. They hoped to make huge profits but didn’t. In fact they lost a billion dollars last year.

The plan was to sell a controlling stake in the outfit to a consortium that includes private-equity firms Gores Group and Platinum Equity.

Despite the fact that the outfit is the number two maker of networking gear, investors are not happy at the bottom line and the deal is floundering.

Earl Lum, chief of telecom gear industry research firm EJL Wireless, told Reuters that investors wanted the novelty of seeing some light at the end of the tunnel with the outfit making some cash in the future.

NSN has only managed to record profitability in two quarters since 2007 and Nokia and Siemens still wanted an arm and a leg for a controlling share in the company.

Siemens is a little miffed with Nokia and felt that its partner had been unable to find an answer. Some financial sources say that Siemens was thinking of taking control of the joint venture.