With rumors of what would happen to the Nokia's Chennai factory swirling about since mid-March there's now some official news on the matter. The Chennai factory, which is viewed as a key manufacturing asset for Nokia, will be excluded from the sale of Nokia to Microsoft due to the tax concerns with the Indian government.

"We are leaving out the plant because of the tax issues," Poonam Kaul, a Nokia India spokeswoman, said by telephone today. The plant, one of the Espoo, Finland-based company's largest phone factories, will make products for Microsoft as part of a servicing agreement, according to Kaul.

Nokia strongly believes its offer to the Indian tax department is fair, Brett Young, a spokesman for the company, said at the time. The company is offering a voluntary retirement plan to workers at the plant near the southern Indian city of Chennai, according to Kaul.

With that part mostly take caren of, all things are still a go for completion of the Nokia sale to Microsoft on April 25th. For how long the plant will continue to be used as part of the servicing agreement though remains to be seen.

Source: Bloomberg - Thanks, Zapella T!