NEW YORK (TheStreet) -- Motorola (MOT) plans to pump billions of dollars in cash into its beleaguered mobile phone business when the company spins it off into a separate company next year, according to the Wall Street Journal.
In the meantime, Motorola also plans to buy back the majority of its $3.9 billion debt, upping the current tender amount to $500 million, the newspaper reports.
Motorola is preparing to spin out its mobile phone and lucrative cable set-top box businesses into a new company to be named Motorola Mobility; the debt buyback and cash injection should help the new entity be in a debt-free and cash-rich state with good credit ratings, making it easier to develop new phones, make acquisitions, or be acquired, the report says.
According to the
, the rest of the cash would be allocated to the remaining company, which makes public safety radios, handheld scanners and telecommunications network gear, and produces most of Motorola's cash. This entity would carry the burden of pension obligations and most other liability, according to the report.
Shares of Motorola were trading down by 0.6% to $7.15 in Friday morning trading.
-- Reported by Andrea Tse in New York
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