Early this morning, Nokia made an interesting announcement regarding its corporate headquarters. Casually known as The Nokia House, the company has inhabited the building since 1997 and has owned the property under its name. With today’s announcement, that all changes but Nokia HQ isn’t going anywhere.
Nokia will be “selling” the headquarters for approximately EUR 170 million (USD $220 million) but will be repurchasing the building under a new long-term lease from Finland-based Exilion. What does all of that mean in simple terms? Essentially, Nokia has opted to pay month-to-month rather than remain the owner and pay heftier property charges. It’s a method of getting some short-term cash for the company to use, which in this case is a quarter of a billion dollars — a sum that could be useful as Nokia tries to get smartphone sales going again.
The practice has its downsides though because over the long-term the lease will probably end up costing Nokia more than its previous arrangement. However, we doubt those costs will rack up too high until at least a year or two down the line. The likely hope is that by then, Nokia will be sustainable itself and eventually buy back the building. Upon this news, the company’s stock jumped up 5.67%.
Don’t freak out folks, the sky isn’t falling for Nokia just yet.