Nokia raises €170 million by selling off HQ

Nokia is to sell of its headquarters at its Finnish base, raising €170 million for the struggling company.

Phone maker Nokia has agreed a sell and lease plan on its property in Espoo, Finland, creating extra cash for the firm in the short term. 

“We had a comprehensive sales process with both Finnish and foreign investors and we are very pleased with this outcome,”  said Nokia CFO, Timo Ihamuotila. “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.” 

He added: “We are naturally continuing to operate in our head office building on a long-term basis.”

Selling and then leasing its property back is a tactic also used by another struggling firm, AMD, last week, and will raise cash that can be used to support the company’s restructuring. 

Nokia has operated in the 48,000 square metre building since its late 90s heyday.

The firm has since seen its sales dramatically drop off, as the likes of Samsung and Apple stole the market. Nokia had been the number one phone maker since 1998, according to analysts at IHS iSuppli, before being knocked from its perch earlier this year.

In attempts to turn its business around, Nokia has put in place major restructuring, committing to cut over 40,000 staff since Stephen Elop took over as CEO in late 2010.

However, despite striking an allegiance with Microsoft to support the Windows Phone operating system, the company has failed to set the crowded smartphone market alight, despite generally favourable reviews of its products such as the recently released Lumia 920.

Time, and indeed cash, is beginning to run out for the firm.  In its most recent financial results the company showed that its cash reserves are quickly dwindling. Net cash during the third quarter was €3.5 billion, a 30 percent drop from the same point last year, when the company had over €5 billion in cash and assets.