The shareholders of the renowned company Nokia have approved the sale of their company’s mobile phones to the technology king Microsoft. The total sale of the mobile phones counts to around 5.4 billion Euros. The deal was supported by the shareholders of the company holding 99% shares of the Finnish company. Despite the loss of the national asset of the company, the deal was passed with the consent of the shareholders due to its financial benefits.
According to the officials, the deal was finalized after a meeting which took place in Helsinki. In September, Nokia decided to sell its services, devices and license the patents in the name of Microsoft. This decision was taken as a result of losses due to the late introduction of smarphones. The huge fall in the demand for cell phones made it sell the business to Microsoft and the ongoing sale of cell phones is expected to be closed in the first half of 2014 after the regulatory clearances.
A 58 years shareholder, Matti Pirkola said that the price offered for the sale is fair in accordance to the situation of the company right now. He has also been an active member of the company since 1980s and also says that if the company would have been active in taking decisions earlier, they would have stepped into such a terrible situation. But in today’s condition there is no alternative rather than the deal finalized with Microsoft.
The final decision of selling the mobile phones to Microsoft is taken to enhance the sale of the company from 2 billion to 8 billion Euros and help it in regaining the investment-grade position from the credit rating agency and return back the cash to the shareholders.
The company also suspended the annual dividend of the year in order to retain the cash. This is the first instance in 148 years when company did not distribute the dividends to the shareholders. In October, the activist investor and billionaire Daniel Loeb took a considerable place in Nokia with the expectation to return cash to the investors which the company would receive from Microsoft as per the deal made by them.
The company excluding the handset business which was in loss is expected to derive 90 percent sales from its telecom unit, Nokia Services and Networks. As a result of the finalization of deal with Microsoft, the shares of the company have experienced a boom.