March 6, 2020 / 11:37 AM / in a month

Nokia draws $560 million R&D loan for 5G

FILE PHOTO: Visitors gather outside the Nokia booth at the Mobile World Congress in Barcelona, Spain, February 26, 2019. REUTERS/Sergio Perez

HELSINKI (Reuters) - Finnish telecoms equipment maker Nokia (NOKIA.HE) drew a 500 million euro ($561 million) loan last month to help it to accelerate development of 5G technology, its annual report shows.

Nokia said that its R&D loan facility with the European Investment Bank (EIB), which has an average maturity of about five years after disbursement, was agreed in August 2018 and available until last month. It drew the loan on Feb. 24.

The company’s finances have been in focus since it halted dividend payments in late 2019 and said it would need to invest more than previously expected in development of its 5G equipment.

This week Nokia rehired former executive Pekka Lundmark from energy group Fortum (FORTUM.HE) as its new CEO to lead efforts to revive its faltering 5G business.

A Nokia representative was not immediately available to comment on details of the loan.

“Nokia will use the loan to further accelerate its research and development of 5G technology, the next-generation mobile telecommunication standard,” the company said when the deal was signed in August 2018.

Reporting by Tarmo Virki; Editing by David Goodman

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