Finish HANDSET MAKE NOKIA is likely to exclude its India factory from the
$7.2 billion deal concluding on Friday to sell its mobile phone business to
Microsoft Corp.
Nokia will operate the Chennai plant, which is being excluded from the deal
due to a tax dispute, as a contract manufacturing unit for MICROSOFT after the
deal.
"Nokia is ensuring all it can to see the transfer of the plant and
other assets to Microsoft by tomorrow," a Nokia spokesperson told PTI.
However, the task at hand is complicated, the spokesperson added.
"With the situation at the moment, it seems highly unlikely that the
transfer will happen in the time frame," she said.
People following the developments at Nokia said the firm is also exploring
the option of operating the plant by entering into a service agreement, which
would allow it to continue as a contract manufacturer.
Last September, Nokia announced it would sell its devices and services
(D&S) business, including assets in India, to Microsoft for $7.2 billion by
March 2014. The deadline was subsequently extended to April 25.
The handset and other asset components under the deal are to be handed over
to Microsoft's Finnish entity Microsoft Mobile Oy.
In March, the Tamil Nadu government served a Rs 2,400-crore notice on Nokia,
saying the company sold products from the Chennai plant in the domestic market
instead of shipping them overseas.
In a separate tax case, the Supreme Court ordered Nokia India on March 14 to
give a Rs 3,500 crore guarantee before it transfers the plant to Microsoft.
The company has often indicated that the transfer of the plant could be
adversely impacted if the dispute remains unresolved.
Recently, the company offered a voluntary retirement scheme to its employees
in Chennai.
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