Infrastructure provider Nokia Siemens Networks (NSN) has secured a loan of around EUR1.2 billion to fund a major business restructure and to cover the costs of its significant redundancy programme, reports Reuters.
According to a source, NSN has raised the money through a group of 14 European and US banks, including Bank of America, Citibank, JPMorgan, Royal Bank of Scotland and Standard Chartered. The company was originally looking for EUR1.5 billion but settled for the lower figure due to “market turmoil”, the source added.
The Financial Times reports that around EUR600 million will be provided as a one-year term loan, which will need to be replaced when it expires in summer 2013. The remainder of the loan comes on a three-year term.
NSN announced last November plans to cut 17,000 jobs – or 23 percent of its workforce – as it restructures the organisation to focus on its mobile business. A subsequent leaked memo listed a number of business areas that the company was considering exiting. It has since reached deals to sell its WiMAX division to NewNet Communication Technologies and its fixed line broadband access business to networking vendor Adtran.
Parent companies Nokia and Siemens bailed the company out with an additional EUR1 billion in equity last year after failed attempts to sell the business. NSN – which has struggled to make a profit since its creation in 2007 – required the loan to see it through short-term funding problems but has since said it won’t seek further cash injections from its owners.