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Nokia (NOK) To Sell, Lease Back Espoo Headquarters

 December 04, 2012 07:43 AM

(By Balaseshan) Ailing cellphone giant Nokia Corp. (NYSE: NOK) has agreed to sell and lease back its head office building in Espoo, Finland on a long-term lease to Finland-based Exilion for 170 million euros ($222.3 million).

Nokia was "evaluating different options for non-core parts, such as real estate holdings, and that includes the headquarters", Reuters reported in October quoting Nokia spokeswoman Maija Taimi. Finnish daily Iltasanomat had reported that the Espoo headquarters is probably worth between 200 million and 300 million euros.

"We had a comprehensive sales process with both Finnish and foreign investors and we are very pleased with this outcome," Nokia's Finance Chief Timo Ihamuotila said in a statement on Tuesday. "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."

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

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

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.

In June, Nokia said it would slash up to 10,000 jobs, or 8% 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.

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

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 European private equity firm, EQT VI. 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 closed Monday's regular session at $3.26. Over the past year, the stock has been trading in a range of $1.63 to $5.87.

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