News Buzz: Nokia Corporation (ADR) (NYSE:NOK), Chesapeake Energy Corporation (NYSE:CHK)
Chesapeake Energy Corporation(NYSE:CHK) would be selling off the oil and gas assets worth $1 billion in Haynesville shales and Eagles Ford in United States to a part of Exco Resources inc. The sale is a part of the company’s plans to raise up to $7 billion cash. CEO Doug Lawyer stated that the company’s assets signed until now amount to $3.6 billion. The energy firm has a long-term debt of $13.4 billion and is staring a funding gap of $3.5 billion in the current year.
The Eagle Ford asstes have a producing capability of 6100 barrels of oil equivalent per day. The daily output of Haynesville shale – which spans Arkansas, Texas and Louisiana had 114 million cubic feet of natural gas in May.
Finnish handset maker Nokia Corporation (ADR)(NYSE:NOK)’s buy out of Siemens Ag’s network equipment is likely to put pressure on its balance sheet and may burn through its cash in the coming year..
The company is paying 1.7 billion euro to take full control of Nokia Siemens Networks (NSN) and offers good growth potential but the network business is cyclical according to various analysts.
This leaves some questions unanswered about the handset maker’s ability to turn around its mobile phone business.Pohoja analyst Hannu Rauhala opined that the worrying cash position may restrict their ability to make a move.
The firm’s net cash position is 3.7-4.2 billion euros at the end of quarter 2 and after NSN deal, its cash position would be 2.0-2.5 billion euros. Canadian bank Canaccord opined that the cash burn can continue for the company and it may just have 1 billion euros net cash by 2014.
Tough competition from Samsung and Apple as well as a tight cash position can worsen the finnish handset maker’s issues. Rating agencies S&P, Moody’s and Fitch had downgraded the company’s long term credit rating to junk last year.
Tags: Chesapeake Energy Corporation (NYSE:CHK), Nokia Corporation (ADR) (NYSE:NOK)