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Moody's sling Nokia to junk status as the once towering Finnish phone giant becomes an underdog.

Friday, 15 June 2012
The sorry state of Nokia described here in a very interest manner by some funny Finnish commentators or analysts.

“Nokia in Finland is a giant that has becomes a weight watcher”  which described how at the peak of Nokia’s corporate fortunes in 2000, the cellphone maker boasted a payroll strength of over 24,000 employees in Finland. At the beginning of June this year, that portly figure had shrunk to a slim frame of 15,900 including 9,100 persons employed by the parent company. Across the globe, Nokia personnel levels stopped growing after 2010.

In doing so, Moody's has lowered Nokia’s credit rating to Ba1 with a negative outlook. Previous rating was Baa3. Therefore, Nokia has reached the so-called junk status by Moody's standard.

"Today's downgrade reflects our view that Nokia's restructuring plan indicates these pressures and capital consumption that is greater than we had previously assumed, "says Wolfgang Draack, vice president and principal analyst of Nokia at Moody's, in a statement.

Friday's downgrade comes despite Moody's view of Nokia's restructuring plan as a positive and necessary for the Group's economic viability. A return to profitability also depends on if Nokia succeeds in its smartphones transition to the new operating system, Windows.

So there lie a once known giant which currently, hold a share of Finland’s GDP of around half a percent with taxes paid only in the tens of millions gradually dissipating.
By Scancomark.se Team



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