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December 5, 2012

Nokia to sell and lease back Finnish headquarters to trim cost

Nokia is also planning to slice nearly 10,000 jobs at its worldwide facilities by the end of 2013

By CBR Staff Writer

Struggling Finnish cellphone maker, Nokia, is planning to sell and lease back its headquarters in Finland for $220m to real estate investment firm, Exilion, for €170m ($223m).

The transaction, which is part of the firm’s restructuring process to raise cash, is expected to be completed by the end of 2012 and is aimed at reducing operations costs and generate a positive cash flow.

Nokia CFO Timo Ihamuotila said that the firm had a comprehensive sales process with both Finnish and foreign investors.

"As we have said before, owning real estate is not part of Nokia’s core business and when good opportunities arise we are willing to exit these types of non-core assets," Ihamuotila said.

"We are naturally continuing to operate in our head office building on a long-term basis."

Spanning an area of about 516,688ft2, the glass and steel structure has been the firm’s headquarters for the last 16 years with 1,800 employees.

The Finnish firm previously revealed plans to close its facilities in Ulm, Germany and Burnaby, Canada in addition to sale of Vertu brand to a private equity firm.

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As part of the move, Nokia is also planning to cut nearly 10,000 jobs at its worldwide facilities by the end of 2013.

Nokia has been witnessing huge scrutiny over its financial situation in recent quarters, while has also been facing continuous credit reductions from all three major credit-rating firms.

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