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Nokia (NOK) Considers Sale of Espoo Headquarters

 October 03, 2012 10:41 AM
 


(By Balachander) Ailing cellphone giant Nokia Corp. (NYSE: NOK) is reportedly considering selling its headquarters in Espoo, Finland, to reduce costs.

Nokia was "evaluating different options for non-core parts, such as real estate holdings, and that includes the headquarters.", a Reuters report quoted a Nokia spokeswoman as saying.

"We are evaluating different options for non-core parts, such as real estate holdings, and that includes the headquarters," spokeswoman Maija Taimi told Reuters.

Finnish daily Iltasanomat estimates the Espoo headquarters is worth between 200 million and 300 million euros ($258-$388 million).

[Related -Microsoft Corporation (MSFT): Little Choice But To Buy Nokia Corporation's (NOK) Devices & Services]

The Finnish company , once a darling of investors in the technology space, is incurring significant market share losses in smartphones and feature phones. The company is finding it tough to cope with the likes of the iPhone and other Android-based smartphones both in the U.S. and emerging markets.

Nokia announced in June that it would slash up to 10,000 jobs, or 8 percent of its workforce, to boost its operating margins. The company plans to implement the cuts globally by the end of 2013. In February, the company said it would trim another 4,000 jobs and shift the device assembly plant to Asia where most of the component suppliers are based.

Nokia, led by Stephen Elop, has already announced several restructuring initiatives. Since Elop took the helm in September 2010, Nokia has trimmed more than 25,000 jobs.

[Related -Microsoft Corporation (MSFT): Did Microsoft Act Late Over Deal With Nokia Corporation (ADR)?]

As part of the restructuring, the Finnish company announced plans to close its facilities in Ulm, German,y and Burnaby, Canada. The company would also close its manufacturing facility in Salo, Finland, while the research and development efforts in Salo would continue.

As part of its transformation strategy, Nokia also disclosed plans to sell its non-core assets, and said it would sell its luxury phone unit Vertu to EQT VI, a European private equity firm. The potential sale, which could fetch about $265 million, is part of Nokia's stated strategy to get rid of its non-core assets as it transforms itself to meet the demands of the market.

U.S.-listed shares of NOK shed 0.38 percent to trade at $2.61 on Wednesday. Over the past year, the stock has been trading in a range of $1.63 to $7.38.

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