Nokia's Growing Cash Mountain

In mid-November 2002, Jorma Ollila, CEO of Nokia and his management team must decide a course of action for his company's growing "cash pile" of ?8 billion. The company does not have any immediate acquisitions on the horizon and boasts a low debt load: ?450 million in long-term debt and ?2.6 billion in customer financing exposure. Ollila has recently ruled out a share buy-back after credit agencies like Moody's threatened to downgrade the company from its current A1 credit rating. Ollila needs to come up with a plan for the cash within two weeks that will suit shareholders. In devising his plan, Ollila and his management need to consider the environment and Nokia's potential future investment and financing needs.