News
Standard & Poor Lowers Nokia’s Ratings on NSN Buyout
Standard & Poor’s Ratings Services has lowered Nokia’s long-term debt rating to ‘B+’ from ‘BB-‘ and affirmed its ‘B’ short-term corporate credit rating. The outlook is stable.
¬The rating action reflects Nokia’s acquisition of the 50% stake in Nokia Siemens Networks (NSN) from Siemens for EUR1.7 billion, making Nokia the 100% owner. Nokia’s strong balance sheet, which S&P views as an offsetting factor to Nokia’s cash burn and supportive to the rating, will weaken following the acquisition.
The debt ratings agency also factors in the company’s estimate cash burn of EUR300 million-EUR800 million during the second quarter of 2013.
The ratings reflect their revised assessment of Nokia’s financial risk profile assessment to “aggressive” from “significant.” They continue to assess its business risk profile as “weak.”
S&P said that it understands that the deal could close in the third quarter of 2013, subject to regulatory approval.
As Nokia was already fully consolidating NSN, the transaction will have no positive impact on Nokia’s reported profitability or cash flow measures, but it will weaken its net cash position.
S&P has lowered it estimate of Nokia’s net cash to EUR1.3 billion or above at end-2013 from EUR3 billion or above previously.
The ratings agency continues to think free operating cash flow (FOCF) will be negative in the second half of 2013 and for the full year, including the cash restructuring outlays after Nokia reported cash burn of at least €300 million during the second quarter.
They also continue to be concerned about Nokia’s ability to sustainably generate positive FOCF–especially in its Devices & Services (D&S) division, given the low visibility on revenues and margins and its small market share in smartphones.
Finally, they also think NSN’s FOCF could fluctuate, notably because of marked swings in working capital. So, they think Nokia may struggle to return to positive free cash generation in 2014.
The stable outlook reflects its expectation that Nokia will maintain a strong net cash position over the next 12 months, despite our anticipation of negative FOCF.
S&P could raise the ratings if FOCF gradually and sustainably became positive. They think this will require Nokia’s market share in the smartphone segment to increase and adjusted consolidated EBITDA margin to return durably to positive territory.
They could lower the ratings if Nokia failed to gain smartphone market share, leading to continuing negative FOCF prospects in 2014 and beyond. This would further reduce Nokia’s net cash position.
Bosun Tijani, minister for Communication, Innovation and Digital Economy, has stated that the federal government is geared towards creating about one million technology jobs for teeming Nigerian youth.
Tijani stated this at the official opening of a solar-powered community ICT center built by the National Information Technology Development Agency (NITDA) in Abeokuta, as part of activities marking the 38th Lisabi festival.
The minister emphasised the commitment of President Bola Tinubu’s administration to invest in the digital economy, driving inclusive growth and empowering the country’s teeming youth population.
“The president made it very clear when I came into office, that he will spend efforts and resources in creating one million technology jobs. So, for anybody that is following the development in the world today you will see that there’s no world without technology.
“There is a strong shortage of technology workforce all over the world, and while a lot of the developed countries have ageing population, and not giving birth to kids, in Nigeria, the average age is 16.9, so our young people are being projected to be the workforce of the future, not only for Nigeria.
“This center here is one of many. In the next two months, we are launching about 30 of them all over the country. This center will be properly animated and we will put resources into ensuring that there are courses for young people to come and take here.
“We are also going to ensure that there are job opportunities that we can connect them to and if anyone wants to follow, follow the three million Technical Talent Program which we have started already in the country”, he said.
He therefore charged the youth to remain focus, and not be discouraged, adding that there is massive employment opportunities in technology as there is no enough people to work in technology all over the world.
“If you ask anyone that works in technology, the entry salary is between N350,000 to N500,000. Technology pays really well, so instead of worrying about things being hard, they should take advantage of centers like this, empower themselves and go for the opportunities the world has to offer them”, he added.
Speaking earlier, Oba Adedotun Are, Alake and Paramount ruler of Egbaland, lauded President Tinubu for approving the centre in Abeokuta, saying that this has no doubt marked another new dawn for the people of Egbaland, given rapid growth, development, and economic empowerment of the people.
National Institute for Policy and Strategic Studies (NIPSS) has predicted that the price of Premium Motor Spirit (petrol) will decline as Dangote Refinery and other local refineries commence full operations.
Speaking on Channels Television on Tuesday, April 1, NIPSS Director-General Ayo Omotayo expressed optimism that fuel prices would fall once more refineries become operational.
He projected that petrol prices could drop to around N750 per litre before the end of the year with a more stable exchange rate.
“We’re looking at it coming down as low as N750 before the end of the year. And of course, foreign exchange will still drop to about 1.3 before the end of the year, and it is going to continue like that as more of our refineries come into place.
Omotayo acknowledged the current economic hardships but insisted that the policy would benefit Nigerians in the long run.Traditional Nigerian cuisine
“The gains at this time are very little, but in the long run, we will make up for whatever sacrifices we have made today as Nigerians” he stated
U.S. President Donald Trump has stated that a deal for the sale of TikTok’s U.S. operations is expected to be finalized before the April 5 deadline.
U.S. President Donald Trump
The deadline, set by legislation passed in January, mandates TikTok’s Chinese parent company, ByteDance, to divest its U.S. assets or face a nationwide ban due to national security concerns.
Multiple non-Chinese firms have expressed interest in acquiring TikTok’s U.S. operations.
Private equity firm Blackstone is considering a minority investment, potentially joining existing non-Chinese shareholders such as Susquehanna International Group and General Atlantic.
In a strategic move to facilitate the sale, Trump suggested that he might consider a reduction in tariffs on China, acknowledging that Chinese regulatory approval may be required for the deal to proceed.
The White House has been actively involved in negotiations to ensure that TikTok remains operational in the U.S. while addressing national security risks.
With TikTok’s 170 million American users watching closely, the outcome of the sale is expected to have a major impact on the social media landscape and the broader tech industry.
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