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Nokia exercises option to sell almost $2 billion in bonds to Microsoft

Microsoft buys Nokia

While Microsoft's purchase of Nokia Device and Services Unit is a work in progress, Nokia has exercised an option to receive €1.5 billion ($1.975 billion US) from Microsoft ahead of the purchase closing.

Microsoft will deliver that amount in the form of convertible bond purchases from Nokia. Should the purchase be approved by Nokia's shareholders in November and becomes finalized, the bonds will be redeemed.

Alternatively, if Microsoft's purchase falls through, the bonds will have different maturity dates and can be converted into Nokia shares. In the press release announcing the option, Nokia intends to use the funds to pay down the debt created from its buyout of Siemens and for general corporate purchases.

Source: Nokia via: AllthingsD

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Reader comments

Nokia exercises option to sell almost $2 billion in bonds to Microsoft

79 Comments

Even if it goes through you still will be buying a "Nokia" device.. Some of you guys act like MS is replacing everyone at Nokia who has brought us Lumia devices.. This is totally not the case... Microsoft working with Nokia to bring us Lumia devices is nothing new❗... If we can get over the name change then we can move forward, and enjoy the great devices that are to come these next few years..

How long do you think the finnish engineers will be working for what used to be a part of Nokia when that part of the company moves to seattle and gets the Microsoft treatment?
I hope I am wrong in my pessimism, as I love my Lumia 920 and want the WP to succeed.

It's already been stated that operations will remain in Finland, and go on business as usual❗.. I really see this as nothing but a name change, more resources for those engineers to innovate faster, and a teardown of walls between Finland, and Redmond. That is what has been said, and we really should just wait to see what happens instead of speculating.. It's all good❕❕❕❕❕❕❕❕❕❕❕❕

I hope you are correct, rodneyej.
Although, Elop stated two months ago quite clearly that there is no intention to sell off Nokia Devices to Microsoft... Of course, that's all what he could say, as the deal was still in the making, but still.

I'm slightly torn. I did want to see Microsoft step up and make their own phone, but this isn't what I had in mind. This pretty much slams the door to all other OEM support... unless WP takes off in the next 18-24 months, then they'll all come crawling back. We'll see. Here hoping for a Surface-style phone. Just got my Surface RT yesterday...loving the design.

Yes.
I have no wish of moving to Android but if this purchase happens and Nokia is gone, then I won't stay. Nokia's efforts and top service is the only thing making WP, with its lack of features and apps, worth having (even though it's a beautifully designed OS, there's only so much good looks can do for you)

I still have no idea what brand the new Lumias will be if not Nokia, which was a very recognized and respected brand.

I think the plan is "Microsoft". Like the Surfaces. Except Microsoft isn't a beloved brand like Nokia. Nor a hipster brand like Apple.
There's a reason why Google hasn't erased Motorola as a brand. But Balmer apparently doesn't understand that.

Microsoft Lumia? At that point you might as well just start using the Microsoft Surface brand.

News flash for you, Apple stopped being a hipster's dreamboat more than a 1/2 decade ago. If anything, Windows Phone has more hipster appeal and BlackBerry even more so.

Here's the difference between MS and Google.  Google bought the entirety of Motorola Mobility.  Microsoft only bought the devices wing of Nokia.  While Motorola is Google property... Nokia still remains an independent company... just without it's mobile phone manufacturing base. 

Understand what? Nokia still exists. Microsoft didn't buy the whole company. Nokia retains the right to it's name. They are allowing Microsoft to keep using it in low end devices for 10 years, but no the hight end devices. It isn't Balmer's choice to use the Nokia name.  I personally would just use the Lumia name. Make Lumia the phone brand and don't even mention microsoft.  Just like the Xbox. You don't see Microsoft on teh front of the device. People call it Xbox and not Microsoft Xbox.

Nokia's efforts and top service is the only thing making WP•

dude what are you talking about. We will get the same top services and that same Nokia effort. Just under a different name.

You're supporting a name and not the people behind the name? That is just ridiculous.

Do you not get that the name 'in general" is irrelevant - the sane engineers are working on it and the same designers, therefore basically the same product.

Look at how skype has been assimilated into MS, they have mostly been left to themselves - i believe it will be the same for Nokia.

I don't think ms are stupid, they know hoe much the name matters - it is likely to be a transitions over a period of time - but, at the end of the day you will still have the device that Nokia would gave created on their own as they have all the 30,000 staff

I don't care about the Nokia name, what is important is that Elop brings the culture over which is what drives the passion behind the devices and attention to customers. The good thing is that 30,000+ employees is large enough to make a culture impact. I hope that this purchase will also influence the other divisions within Microsoft to make true One Microsoft.

I hear you and agree. I just think that from a marketing perspective Nokia brings a history and recognized branding that you are in one fell swoop removing. Even when ford bought jaguar they didn't start calling all the jaguars Fords. (btw as a Jag owner that was a sad day, though jag needed the money).

Elop is a loser. Couple of years and Samsung has bought Microsoft's mobile business. And Elop is the new Samsung ceo.

With Nokia excercising their option to receive money from MS sorts of seals the deal for the acquisition by MS of Nokia's devices and services at a later date. The possibility of the deal pushing through becomes more real with this excercise of option by Nokia.

Its what's best for Nokia, MS, and the consumer,, not what's best for your personal hang-ups about a name change..

But your vote will hardly count... Those who have the majority holdings are the ones that negotiated the deal, they will all vote yes. Little owners like you and me won't have enough votes, its not about how many people, its about how many shares get the vote.

Plus keep in mind the stock is up 50% since announced, those buyers are buying to put in a yes vote, those who sold, won't be around to put in the no vote.

They already did. The shares rose to the extremes when they announced that MS will Buy Nokia. That pretty much guarantees that the deal will go through. Because the shareholders want it to happen.

I'm just thinking that maybe MS will sell Nokia phones and ditch the Lumia brand. That would simplify branding as Ballmer said.

The deal is pretty much guaranteed to go through. Nokia shares rose through the roofs when Microsoft announced that they're acquiring Nokia.

You can stop crying now and look at the bright side. Now they have more money to spend to bring is extremely high quality phones.

It’s a very smart move by Nokia. With their bond rating being so low (junk status) they would have a difficult time raising capital at a reasonable interest rate. They would essentially have to go through what could be equated as a loan shark for businesses. I imagine MSFT is giving them a fair interest rate on the bonds.
I'm actually shocked at the generosity MSFT has shown to Nokia. They put it all on the line going with WP and MSFT has surely acknowledged that and has rewarded them for their loyalty. No one else sure gives a dam about WP. Except us of course!

I think Microsoft is aware that if WP still exists and has reached 3rd place, they owe it to Nokia. And they probably have the vain hope that if they buy Nokia (and destroy the smartphone brand) current users will keep buying the devices MS produces next. They'll have a bitter surprise.

Yes, Nokia was such a successful company before, Apple and Blackberry shivered at the sight of Symbian.
The N9 was a iPhone killer.

I am thinking this too.. An ideal way this could have happened is MS ties up with Nokia in the sense let Nokia operate everything, MS just orders the phones they need manufactored by Nokia and they can have both the names on the top.. With MS taking over Nokia and not being able to use the Nokia name in smart phones i think is going to be a disaster.. I think Most pple bought it because of Nokia. Most pple dont buy it since it is windows operating system. So remove nokia and still try to sell it as windows phone from MS. It may be a wrong move on MS part.  

That doesn't make much sense, since Symbian was killing Nokia, they were going down before MS deal (read money).
If it was just a matter if name, Nokia should be a wealthy and successful company before WP.

Hahaha if you think Windowsphone will fail because of this? Not everyone is a Nokia fanboy you know? The majority of us are Windows Phone fans NOT Nokia fans. And we'll be enjoying whatever Microsoft(Nokia) brings us next.

I hope after 2 years MS get sick of the phone business and sell it back to Nokia. Then Nokia can start a phoenix line of phones.

Wow, that's way too wishful thinking: two years from now, MS quits a business they have for more than 15 years, Nokia makes a come back after wining 36 Euromilions in a row, and uses an obscure vapourware OS.

Yanks so-called communists and the biggest terrorists on Wall Street with ancient Rome took over my Nokias, it is cut free amenities and lodging fees. Time to let go and change to the Japanese Sony Be IOS. I have no intention of killing corporate sponsor.