Friday, January 16, 2009

Elcoteq to Close Plants, Cut 5,000 Jobs to Trim Costs

By Juho Erkheikki

Jan. 15 (Bloomberg) -- Elcoteq SE, a Finnish contract manufacturer of handsets and flat-panel televisions, will close plants and eliminate almost a quarter of its workforce because of sliding demand.

Elcoteq will close facilities in Romania, Russia and the U.S., as well as merge plants in China, the company said today in a statement. Luxembourg-based Elcoteq aims to save as much as 100 million euros ($132 million). A 24 million-euro charge will be taken for the measures, of which 15 million euros will be booked in the fourth quarter of 2008.

The company also plans to raise capital through a “structured equity-linked instrument” to boost its balance sheet. Elcoteq reiterated its 2008 profit outlook.

Elcoteq jumped as much as 23 cents, or 22 percent, to 1.23 euros, where the stock traded as of 2:29 p.m. in Helsinki.

To contact the reporter on this story: Juho Erkheikki in Helsinki at jerkheikki@bloomberg.net.

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