Motorola to pour billions into handset unit

Motorola to pour billions into handset unit

Dylan Bushell-Embling  |   June 21, 2010
telecomasia.net
Motorola plans to tip billions into its mobile phone unit once it gets spun off into a public company, according to reports.
 
The company intends to buy back the majority of its around $3.9 billion in debt, and allocate its remaining cash of between $3-4 billion to the spun-off unit, sources told the Wall Street Journal.
 
The spun-off unit would be named Motorola Mobility, and include the handset and set-top-box business. The remaining assets would form Motorola Solutions, which would be saddled with Motorola's remaining pension obligations and liabilities.
 
The profitable Solutions division would not be left in the cold though, and has enough cash not to be overwhelmed by these debts, the sources claimed.
 
The goal would be to leave two smaller companies with clear balance sheets, capable of making acquisitions or attracting acquisition attention of their own, they added.
 
Motorola's handset division has lost around $5 billion over the last three years, including $192 million in the last quarter.
 
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