After declaring bankruptcy in January, Canadian telecommunications conglomerate Nortel Networks has decided to end its current restructuring activity and will liquidate all of its core assets by accepting a $650 million bid by Nokia Siemens Networks for the most lucrative part of its carrier-networks division and a wireless-research unit in a statement filed on Friday.
Representatives from Nortel are also exploring other offers from other unamed parties related to other business units, but have not set dates for final closure and liquidation at this time, nor does the company have a timetable for the length of time it will continue to operate in its current state.
In a related development, Nokia-Siemens Networks has issued a press release in response to the accepted bid for Nortel’s LTE and CDMA R&D units along with statements from Verizon Wireless, Sprint, Canada’s Bell Mobility and Telus praising the development in terms of strengthening its CDMA technology portfolio which many observers see as crucial for the North American market.
Due to Nortel’s restructuring process, the transaction is subject to the approval of the United States Bankruptcy Court and the Ontario Superior Court of Justice. Hearings will be held on or before June 29, 2009, with final sale hearings expected on July 28 in the US and July 30 in Canada. Closing of the transaction is expected to occur in the third quarter of this year subject to receipt of necessary regulatory approvals.
To that end, Nokia-Siemens has secured a loan from Canada’s government-owned export credit agency, Export Development Canada (EDC) worth US $300 million in order to assist with the transaction.Â If the transaction is approved after final regulatory approvals, more than 2,500 Nortel employees located in Ottawa, Canada, Dallas, United States, along with employees in Mexico and China will subsequently be transferred to Nokia Siemens Networks.