Unable to sell Lumia and survive, Nokia leases head office building in Finland for $220 million

Telecom Lead India: Finnish mobile phone major Nokia has sold its head office building in Espoo, Finland on a long-term lease to Exilion for $220 million.

The struggling phone company will also lease back the property. This means it is not shifting its base.

Nokia has already sold its luxury phone brand to Swedish private-equity firm EQT Partners AB. The move to sell off Vertu was a part of Nokia’s divestment strategy and turnaround plan. The company is shedding non-core businesses as it struggles to turnaround its core smartphone operations.

Nokia is also selling non-core business of Nokia Siemens Networks.

The company is selling its headquarter after it posted 19 percent decrease in third quarter revenue to 7.24 billion euros. Inadequate strategies around Symbian and Lumia contributed to the decrease in revenue.

Revenue from Nokia’s main business divisions – devices (down 34 percent) and Nokia Siemens’ mobile broadband (up 3 percent) and location (down 6 percent) could not help the struggling company to show profits in third quarter.

Nokia’s third-quarter net loss widened to 969 million euros ($1.27 billion) from 68 million euros a year earlier.

Though Nokia is betting on Lumia range smartphone, volumes of Lumia in third quarter decreased quarter-on-quarter to 2.9 million units.

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

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