Tuesday, December 2, 2014: Reports have arrived about the fast growing smartphone maker, Lava, which is considering to buy the Nokia’s shut-down handset manufacturing plant in Chennai. If the deal gets approved, then it may even raise an opportunity for thousands of former workers to get re-employment there.
People aware about the deal have told ET that the two companies have already signed a non-disclosure agreement. One of them said, “Lava’s manufacturing team has already visited the plant and has done the assessment. It will make a proposal to Nokia mid-December after taking all aspects into consideration.”
They had even indicated towards the tax dispute between Nokia and the government saying that the “tax issue needs to be sorted out before a final deal is sealed though.” This issue had prevented the company from transferring the plant to Microsoft as part of the global $7.2-billion deal. The factory went completely out of operations after Microsoft had decided to stop using the plant from 1 November, wiping off many from their jobs.
Sources claim that the Finland based M&A team of Nokia was recently in India to talk about the deal with Lava. One of the person close to the deal said, Nokia has already communicated to Lava that the ongoing tax and lease-related issues are being discussed with the authorities concerned.” He further added, “It has asked Lava to continue with the assessment since there are high chances that these issues would get resolved soon.”
Even though no valuation estimate has been revealed yet, the Indian tax department had marked the value of Nokia’s fixed assets including the factory and a few sales offices to be at 5860 million in the Delhi High court. Sources claim that the valuation might have now gone down owing to the depreciation by almost 10-12 per cent.
Lava is headed by co-founder and chairman and managing director Hari Om Rai with its headquarters in Noida. It was set up in 2009 and sells devices under the Lava and Xolo brand names.
