Finnish handset maker Nokia, which is selling its devices and services business to Microsoft, will borrow $1.97 billion from the US software giant to pay off loans taken to acquire the stake held by Siemens in their joint venture NSN.
In connection with the deal, Microsoft had agreed to make 1.5 billion euros of financing available to Nokia in the form of three tranches of 500 million euros ($658.77 million) convertible bonds.
Nokia has decided to draw down all the financing and will issue three tranches of senior unsecured convertible bonds, it said in a statement. “Nokia intends to use the proceeds of the offering to prepay financing raised for the acquisition of shares in NSN, which was completed in August 2013, and for general corporate purposes,” it said on Friday.
Microsoft earlier this week agreed to acquire a major part of the devices and services business of Nokia and license its patents for about $7.2 billion. Nokia will keep its telecom network equipment arm NSN, mapping and location services (HERE), its CTO office and its patent portfolio.