Monday, November 29, 1999

Motorola to buy back debt, pump cash into spinoff - WSJ

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REUTERS - Motorola Inc will buy back most of its debt and pump the bulk of its remaining cash into its proposed spinoff of its money-losing mobile devices unit, the Wall Street Journal said, citing people familiar with the matter.About $3 billion to $4 billion is expected to be given to the new company to be called Motorola Solutions, which will be free of pension liabilities and most other obligations, the paper said.On Feb. 11 Motorola said it aims to split into two companies in the first quarter of 2011, one to focus on cellphones and television set-top boxes, and the other on enterprise networking.The company's cellphone unit has been struggling to compete with new smartphones and has not had a blockbuster since the Razr, while its set-top box business suffered due to a weak economy and the wireless network equipment business was hit by a consolidation among telecom operators."The board does not look at this as a defensive move," a person familiar with the matter told the Journal. "It will be offensive."The idea is to leave two smaller companies with clean balance sheets that could make acquisitions or themselves be acquired, while buying back debt before the split would boost the remaining companies' credit ratings, the sources told the paper.Reuters could not immediately reach the company for comment outside regular U.S. business hours.(Reporting by Antonita Madonna Devotta in Bangalore; Editing by Valerie Lee)(For more business news on Reuters India click

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