Yet another miracle for Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V). The company has received the permission it needed from Indian authorities to sell its assets in their country. That’s according to Reuters, which reports that officials have accepted a security deposit in exchange for unfreezing the assets.
Nokia strikes a deal with India
Tax officials in India froze Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s assets in India because of a tax dispute in connection with licenses for mobile phone software. The company had been planning to include those assets, including its handset factory in Chennai, with the sale of its devices division to Microsoft Corporation (NASDAQ:MSFT).
It did have a contingency plan in place, however, in case officials did not unfreeze the factory. Nokia and Microsoft had agreed that the factory would operate as a contract manufacturer for Microsoft after the sale if the facility was not able to be transferred to Microsoft
India unfreezes Nokia’s assets
This week Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) went to court to offer to put approximately $365 million up as a security in exchange for having its assets in India unfrozen. Today’s court appearance was an appeal on the freezing of the facility in India. The company was appealing the seizure of the factory and attempting to fully resolve the tax dispute before it closes the deal with Microsoft. Today was the deadline Nokia set for itself to get the assets in India free from the government.
However, the tax battle continues in India, and tax department lawyers told Reuters that Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) could have to pay as much as $3.4 billion in taxes. That would include penalties for not paying taxes and interest. But at least this one part of the problem appears to be solved.
Nokia deposits a security
Under the terms of the deal between Indian officials and Nokia, the company will place about $367.17 million into an escrow account. That is being done in exchange for India unfreezing the factory so that Nokia could transfer it to Microsoft.
Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s case is one of several high-profile cases. Other foreign companies are also being pursued on tax disputes by the Indian government.