Image caption Microsoft's feature phones run a small number of apps but are less capable than smartphones
Microsoft is pulling out of the "feature" phones business.
The Nokia brand is very strong in certain markets too and HMD will probably target these emerging markets."
In a separate agreement, HMD has acquired the exclusive rights to use Nokia's name for a new range of smartphones and tablets.
The executive worked at Nokia for 13 years, serving as its chief procurement officer until 2012.
"Branding has become a critical differentiator in mobile phones, which is why our business model is centred on the unique asset of the Nokia brand and our extensive experience in sales and marketing," said HMD's chief executive Arto Nummela.
But the deal allows it to benefit from its mobile legacy without taking on much risk itself.