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Motorola's Handset Division to Be Relieved of its Debt Obligations
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Motorola's handset division is likely to walk way from its parent company when the two are finally split largely free of debt, and with a large pot of cash for investment, reports the Wall Street Journal. Citing people close to the discussions, the newspaper said that Motorola is planning to buy back most of its debt and give the bulk of its remaining cash - roughly $3 billion to $4 billion - to the new company centered on the mobile phone unit.
The new company would also be relieved of its pension liabilities and most other obligations. The idea behind the split and debt buyback is to leave two smaller companies with clean balance sheets that could make acquisitions or themselves be acquired, the people familiar said.
A Motorola spokeswoman declined to comment on the company's specific plans. "The co-CEOs have a common vision and continue to work together and with respective teams to position each business to stand alone and succeed," she told the newspaper.
The handset division, under its CEO, Sanjay Jha has slashed costs at the company since he took over. It is now expected to move back into profit by the end of the year, after losing around $5 billion over the past three years.
The formal splitting of the company is expected to take place next year.
On the web: The Wall Street Journal
Tags: [motorola] [planning] []
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