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Nokia is poised to sell off its Vertu luxury handset division as it struggles with its financial woes. As the Finnish firm suffered the third blow to its credit rating in recent weeks, it is reported to be in advanced talks to offload Vertu to private equity group Permira, whose upmarket goods holdings include Hugo Boss and Valentino.

The luxury brand, which makes phones using precious metals and stones, at prices up to $130,000, could fetch about €200m, analysts told The Financial Times. Nokia launched the subsidiary in 1998 and has stores in many upmarket shopping areas such as London's Bond Street, and outlets in over 60 countries. It was also the only operation Nokia left in Japan when it quit that market in 2008, though it then closed down its Vertu stores in Tokyo last year.

Goldman Sachs is advising Nokia on the sales process, which could also attract luxury goods brands. Annual revenue for the business is estimated at between €200m and €300m.

Meanwhile, Standard & Poor's has completed a hat trick of credit ratings agencies to lower their assessment of Nokia, following similar downgrades by Moody's and Fitch. In a statement, S&P said that "the action reflects a downward revision of our expectations for revenues from Nokia's Devices and Services division in 2012 and a subsequent revision of our profitability and cashflow assumptions."

The firm was positive about the growth potential of the Lumia smartphone range, but said this was not offsetting the faster than expected drop-off of Symbian revenues. It thinks "smartphone revenues in absolute terms could start rising by the end of 2012, contributing to a stabilization of revenues" around the turn of the year.

It also offered a bleak outlook for the low end handset business, Nokia Mobile Phones, noting: "We understand that Nokia intends to launch new devices to close the gap in this segment but we expect competition from manufacturers of low price devices to intensify and we have slightly revised our volumes and price assumptions for the mobile phone operations."

S&P lowered its long term credit rating to 'BBB-' from 'BB+', and its short term credit rating to 'B' from 'A-3'.

Nokia responded in its own statement, saying: "As we have detailed in recent announcements, Nokia is in the middle of a transformation program which encompasses every aspect of our business. We are implementing a decisive action plan to position our company for future growth and success. The main focus of these actions is on lowering the company's costs, improving cashflow and maintaining a strong financial position, while bringing attractive new products to market."

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