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Nokia Sells Its Headquarters to Raise Cash

PolygamousRanchKid (1290638) writes | about 2 years ago

0

PolygamousRanchKid (1290638) writes "Nokia Corp. gained financial wiggle room and a potential defense against a takeover by becoming a tenant in the headquarters overlooking the Gulf of Finland that the company has owned and called home for 16 years. The Finnish handset maker, scrambling to raise cash and cut costs amid deepening losses, raised €170 million ($222 million) by selling the suburban-Helsinki building to Finnish property investor Exilion Capital Oy and agreeing to lease it back on a long-term basis. This deal, which Nokia first said it was pursuing in October, follows a move earlier in the fourth quarter to raise €750 million in a bond offering.

Sale-leasebacks have become a common practice for companies looking to raise cash, but they are also used as a defensive measure against potential acquirers buying the business and then selling off pieces, like real estate, as a means to raise money. The company has also been selling patents and divesting itself of parts of its business, including an optical network sold this week by its Nokia Siemens Networks arm.

Nokia has been under significant scrutiny over its cash position in recent quarters, and has been subject to a series of credit downgrades from the three major credit-rating firms, all of whom have cut Nokia's debt rating to junk. Its net cash position stood at €3.6 billion at the end of September, down from €4.2 billion at the end of June."

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