Elcoteq axes 5,000 jobs; hires advisors for capital increase
Finnish contract manufacturer Elcoteq said it would shut plants and cut nearly a quarter of its global workforce as part of cost-saving efforts to adjust to declining sales.
The company, which makes handsets for Nokia and blackberry maker Research in Motion, also plans to carry out a capital increase through a structured equity linked instrument during the first half of 2009.
The company has hired Finland's Berhan, Singapore' Avista Advisory Partners and Fredericks Michael & Co in the US to be its exclusive advisors in the process.
Elcoteq said it would cut 5,000 jobs through redundancies and by closing down factories in Romania, the US and Russia, while merging two of its China plants. This, along with other cost-saving measures, would help the group cut annual costs by E80m-E100m, the company said in a stamenent.
Meanwhile, Elcoteq stuck to its full-year guidance for 2008, reporting Q4 sales of roughly E889m with underlying operating profit at around E1m.
Elcoteq is headquartered in Luxembourg and listed on Nasdaq OMX Helsinki. Its main shareholders are Piippo Antti Olavi (43.6%), Vanhanen Jorma Kalevi and Sjšman Henry Edvard (20.7% each).
