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Apple deal could buy Nokia time to change: Moody's

A customer looks at Nokia phones at a showroom run by Softlogic in Colombo
A customer looks at Nokia phones at a showroom run by Softlogic in Colombo

HELSINKI (Reuters) - Struggling Nokia possibly bought itself more time to change itself through a patent deal with Apple , ratings firm Moody's said on Monday.

However, it said the patent deal was not sufficient enough to change its view on the pressures Nokia's creditworthiness faces and it would continue its review for a possible downgrade on its rating of Nokia.

Last week Nokia won a long legal battle over technology used in Apple's top-selling iPhone and will likely be paid hundreds of millions of dollars, with some experts estimating Apple's one-off payment at $650 million.

"The payments from Apple may give Nokia more time to cope with a challenging portfolio transition before its capital structure, which is currently very strong, begins to erode," Wolfgang Draack, Senior Vice President at Moody's, said in a statement.

After Nokia warned on second quarter results on May 31, Moody's placed Nokia's A3 long-term debt rating on review for downgrade amid concern that Nokia is at risk of losing its market leadership position, brand recognition and scale while possibly also experiencing negative cash flow.

(Reporting by Tarmo Virki, editing by Bernard Orr)

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