updated 05:05 am EST, Tue December 4, 2012
Nokia sells Espoo headquarters to help stem cashflow issues
Nokia has confirmed that it has carried through on plans to sell its Espoo, Finland headquarters and lease the space back. It has entered into a long-term lease with Finland-based Exilion with the sale to be finalized by the end of this month. Although some evaluations placed the value of a potential sale at between 200 to 300 million euros, Nokia said it made 170 million euros in the deal.
"We had a comprehensive sales process with both Finnish and foreign investors and we are very pleased with this outcome," said Timo Ihamuotila, Nokia CFO. "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. We are naturally continuing to operate in our head office building on a long-term basis," he added.
Nokia has been burning through its cash stockpile, which was over $11 billion just five years ago when the iPhone launched. In May, that had dwindled to just $2.7 billion and was facing the distinct possibility that it would run out of cash by end of 2013. It has been undertaking massive restructuring efforts shedding 17,000 jobs and closing factories. Sales of its Windows Phone OS-powered handsets have also failed to stem the losses. The sale of the property will inevitably help with its cash flow issues.
However, in some good news for the company, it emerged yesterday that some analysts believe that its flagship Windows Phone 8 smartphone, the Lumia 920 may have experienced a surge in sales following its launch, helping it to the number three spot in smartphone sales in the US. It has reportedly sold out in some regions, while sales in Europe are also reported to be strong. Strategy Analytics predicts that Nokia will have sold five million Lumia handsets for the quarter, up from 2.9 million ahead of the Lumia 920 launch.