Nokia Plans To Sell Its Headquarters To Raise Cash

Must Read

Retired NBA Player, Kobe Bryant, Dies In Helicopter Crash

Retired NBA player, Kobe Bryant has lost his life at the age of 41 in a helicoper crash in...

Why Amotekun Must Not Be Allowed To Operate: Tanko Yakasai

Tanko Yakasai, has advised the federal government against accepting the Western Nigeria Security Network code-named: Amotekun. He said this while...

Boy Killed, Several Injured As Boko Haram Bombs Borno Mosque

  Following the attack by Boko Haram sect on a mosque in Gwoza, Borno state, on Sunday, a 12-year-old child...

Lassa Fever: Doctor Quarantined In Jigawa, Another Case Confirmed In Ogun

A medical doctor has been quarantined after showing signs of Lassa fever at Jahun local government area of Jigawa...

TY Danjuma’s Opinion Doesn’t Matter: Buhari

President Muhammadu Buhari had slammed Theophilus Danjuma, retired general, saying his opinion doesn't matter than that of millions of...
Information Nigeriahttp://www.informationnigeria.org
Information Nigeria is Nigeria's No.1 Information Portal.

Nokia has started a process to sell off its headquarters outside Helsinki as the stricken Finnish mobile phone maker urgently looks for ways to conserve cash.

The loss making company is looking to sell and lease back the building that employs 1,800 people in a move that could raise €200m-€300m, according to estimates.

The move comes amid intense scrutiny of Nokia’s cash position after it burned through liquidity at a very fast pace around the turn of the year. In the second quarter of this year, its net cash position fell 14 per cent to €4.2bn due entirely to a dividend payment to investors.

“We have ample cash resources to do what we need. But to cut costs and conserve cash we are looking at all possible options with no stones being left unturned. One of those is the possibility of selling our headquarters,” Nokia said.

Nokia moved out of central Helsinki in 1996 to a striking glass and steel building on the edge of the sea in the neighbouring town of Espoo that it expanded in 2001 to its current size. It pointed to other Finnish companies that had sold and leased back their headquarters in recent years, including Kone, Stora Enso and UPM-Kymmene.

Nokia has sent documents out to interested parties but a sale is not imminent. It had earlier said, when it announced its second-quarter results, that it was looking to sell its property holdings around the world. “We are not a real estate company and we would rather invest in our core operations,” it said.

But analysts remain concerned about the level of cash burn as the company fights for survival following a series of disappointing product launches in an attempt to compete with Apple’s iPhone and companies using Google’s Android platform.

Credit analysts stress that technology companies can go bust with positive cash balances, pointing to Nortel, which had several billions of dollars in cash on its balance sheet when it went bankrupt in 2009. Standard & Poor’s, the credit rating agency, said in August when it downgraded Nokia again that it expected the group to end this year with less than €3bn in net cash.

Nokia in return has touted its ability to squeeze cash out of its business, using advanced royalty payments on some of its patents to avoid a worse cash burn in the second quarter. It also has an undrawn credit line of €1.5bn, which is available until March 2016.

Analysts have speculated that Nokia will soon have to cut its dividend to protect its remaining cash. Its first debt repayment is for €1.25bn in early 2014.

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

More Articles Like This

- Advertisement -