Nokia is looking to raise some money after its rather poor quarterly earnings last week, and Reuters is reporting it is in talks with a private equity firm to sell its Vertu subsidiary for 200 million euros.
During the earnings announcement, Nokia said it would sell of its non-core assets to avoid prolonged exposure to extraneous elements of its business. Vertu, a brand often mocked for its ostentation, is well known for releasing phones with gem stones and diamonds at prices equivalent to a small house or high-end automobile. The Financial Times reported in December that Nokia was shopping around for a buyer, and that despite logic to the contrary, Vertu is actually a profitable enterprise, since they likely produce only a small number of high-margin devices.
Nevertheless, Nokia cannot afford any excess red on its balance sheet, and needs to raise the cash more so than create luxury smartphones for the 1%. Standard & Poors recently cut Nokia’s credit status to ‘junk’ rating, meaning it doubts the company’s ability to pay back its debts in due time.