Nokia seeks €750m from bond issue to fund turnaround plans

FINNISH mobile phone manufacturer Nokia yesterday said it would issue €750m (£609m) of convertible bonds, with the proceeds used to fund an ambitious turnaround plan.

Nokia’s cash reserves have tumbled this year as the company – which was once the world’s biggest mobile phone manufacturer – continues to struggle in the face of tough competition from the likes of Apple and Samsung.

The firm is pinning its hopes on the performance of its flagship Lumia smartphone range, with new handsets due out early next month featuring the forthcoming Windows 8 operating system.

The bonds, which can be converted into shares in 2017, will pay a coupon of between 4.25 and five per cent. They are due to start trading on Friday.

Earlier this year the major credit ratings agencies downgraded the manufacturer’s debt to “junk” status after it announced severe losses.

Nokia’s stock fell on fears that the eventual conversion of bonds into stock will dilute earnings per share.