Nokia getting nearly $2 billion from Microsoft well ahead of deal closing


The company formerly run by Steven Elop, left, will receive $2 billion from Microsoft soon.

Microsoft and Nokia reached a $7.17 billion agreement to sell the latter company's smartphone business to the former company, though Nokia will receive about $2 billion from Microsoft soon to help pay for some current expenses.

Nokia's announcement, made late on Friday, revealed that Microsoft offered the company 1.5 billion euros (almost $2 billion) of financing as part of their Devices & Services deal. The money is in the form of three convertible bonds valued at 500 million euros each. Nokia said it is exercising its option to use those bonds this month.

Some of the money will be used by the company to help pay for the financing raised a few months ago for its buyout of Nokia Siemens Networks. That deal closed in August with Nokia now in full control of the subsidiary, now named Nokia Solutions and Networks. The rest of the bonds will be to pay for "general corporate purposes," according to Nokia.

If the Devices & Services deal with Microsoft happens to fall through, Nokia will have to pay the company's money back over a period of several years, or Microsoft could simply receive the equivalent in Nokia stock.

Source: Nokia | Image via Microsoft

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24 Comments

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Have to have them BIG bucks to pay the big shot them BIG bonuses they will be getting for doing nothing but selling the store.

Enron said,
Is it just weird lighting in that picture or is Steve Ballmer registering an unusual sweat pattern?

That's because he's wearing a sweater, duh!

Enron said,
Is it just weird lighting in that picture or is Steve Ballmer registering an unusual sweat pattern?

In order to sweat so profusely the guy must be drinking two gallons of water each day.....

Microsoft is an incredibly rich corporation, they made $25 billion US last year alone and are sitting on $70 billion plus US in cash and cash equivalents. The financial cost of this is nothing to them and they way they are financing is super smart with oversees money. Now the deal might go horribly wrong and could end up being a financial disaster in the long term but the cost of the deal upfront is almost literally pocket change to Microsoft.

I really hope microsoft get their act together with Windows Phone. It's been slow and lacking with their updates and Nokia has been hindered and restrained.

Richio said,
I really hope microsoft get their act together with Windows Phone. It's been slow and lacking with their updates and Nokia has been hindered and restrained.

Now they can before they couldnt and the reason was simple. Microsoft was earning only 10$ per device for nokia phones and nokia simply didnt have money and resources to invest deeply on creating innovative device. So both couldnt do more. Now however microsoft will earn at least 150$ per device so they can invest more, they have lots of cash and resources to do that. I thing except for some key apps Microsoft will push nokia apps to other devices from other vendors simply to push windows phone ecosystem, just like google does.

Richio said,
I really hope microsoft get their act together with Windows Phone. It's been slow and lacking with their updates and Nokia has been hindered and restrained.

Windows Phone isn't Android. It's not set out to be a million things at once.

There are BASIC things missing. Nothing to do with Android, just essential things that all smartphones should have

I am assuming they don't want to loose any time, instead they have already started working on next big thing. looking forward to it definitely. steve ballmer definitely left a good heritage before leaving. Thnx steve.

I can definitely see a lot of good for Nokia software engineers to be more directly involved with developing Windows Phone OS as soon as possible. They have done an extremely good job developing their own applications keeping in style with the OS. To have bleed over from that, to the OS and have them developing the OS features and keep the Microsoft engineers working on broadening the supported hardware.

Until the deal is officially closed, they cannot legally work together any closer than they already do under the assumption that it will not go through.