Nokia sells power operations for 1.4 bln markka

[Reuters]

HELSINKI, Nov 8 (Reuter) - Finnish technology group Nokia,
increasingly focusing on telecommunications, said on Tuesday it
would sell the operations of its Nokia Power unit in a deal
valued at 1.4 billion markka ($297.2 million).
Nokia, a favourite among investors over the last year as a
result of its sharply better results, said the operations would
be sold to power company Pohjalan Voima, 40 percent owned by
Finnish engineering and forestry firm Repola.
``During recent years, Nokia has intentionally steered its
operations towards the telecommunications and electronics
industries,'' Nokia president Jorma Ollila said.
He said telecommunications already accounted for more than
60 percent of the group's net sales, which rose to 18.194
billion markka ($3.86 billion) in the January-August period this
year. Ten years ago this ratio was only some 14 percent.
``Divesting our energy operations is a logical step in
Nokia's strategic development,'' Ollila said in the statement.
Nokia Power's net sales last year totalled 550 million
markka ($116.8 million). It has 63 employees.
``The deal is valued at about 1.4 billion, of which (the) net
capital gain is about 700 million markka ($148.6 million),''
Nokia said.
The deal includes the transfer of Nokia's shares in power
companies Teollisuuden Voima, Pohjolan Voima, Lansi-Suomen Voima
and Kolsi to Pohjalan Voima.
Repola said in a separate statement: ``The acquisition will
secure Repola's energy self-sufficiency for several years ahead.
The deal will have no bearing on Repola's financial results for
1994''.
On October 19, Nokia reported an eight-month profit of 2.29
billion markka ($486.2 million) before extraordinary items and
taxes compared with 466 million markka ($98.94 million) in the
same 1993 period.
Nokia Telecommunications' net sales increased by 54 percent
and the sales of Nokia Mobile Phones, the world's second largest
maker of mobile phones, jumped 64 percent.
In line with this development, Nokia's preferred share, now
also listed on the New York Stock Exchange, has soared around
130 percent this year.
However, it traded four markka lower at 670 on Tuesday
compared with the year high of 704 markka ($149.5) set on
October 27.
On the same day as Nokia published its results, it said it
was considering the sale of its subsidiary Nokia Tyres on the
Helsinki Stock Exchange but that it would continue to be a major
minority shareholder in the unit which had sales last year of
862 million markka ($183 million).