Nokia has reached agreement with representatives of the Turkish government on the payment of debts owed by the Turkish mobile telephone service provider Telsim.
The agreement was reached in talks with the Turkish state guarantee fund. The ailing Telsim reverted to state ownership last year.
Nokia says that it is unlikely that it will recover the whole debt of EUR 670 million. The final sum will depend on how much Telsim brings in when it is auctioned off in December.
The starting price of the state auction is EUR 2.3 billion, but analysts expect the price to rise to about EUR 4 billion.
Observers who have been following the situation were not surprised at the news. Hannu Rauhala, who monitors Nokia for Opstock, says that the agreement will make it easier to sell Telsim.
He also sees benefits for the whole field of mobile telephony in the region.
In the 1990s Nokia helped finance acquisitions by Telsim, which later failed to pay its debts to Nokia and to the American manufacturer Motorola. Both companies have been trying to get their money back for five years.
Nokia has accused the Uzan family, which owned Telesim, of economic mismanagement. A US court in New York found in favour of Nokia in 2003, ordering the family company to pay Nokia 700 million dollars (EUR 570 million).
Jet planes and luxury apartments owned by the Uzan family have been repossessed as part of the process, but Telsim's creditors are still waiting for their money. Telsim's debt to Motorola is EUR 2 billion.
Telsim's creditors have been negotiating with the Turkish government since June last year when the company fell into Turkish state hands.
