Nortel to auction off GSM business

 

Bidding closes 5th November.

Nortel announced today that it is to sell of its GSM business using an auction process.

The company has undergone something of an annus horribilis this year, filing for bankruptcy protection in January and shedding various parts of its business ever since.

A deal with Nokia Siemens saw Nortel offload its wireless business for US$1.13bn ($1.3bn), while earlier this month the firm sold its Enterprise Solutions business to communications firm Avaya for US$900m.

The company lost a lucrative contract in July for the 2012 Olympics, its president and chief executive Mike Zafirovski stepped down in August and the board was slashed from nine members to three. Few people will be looking forward to the Christmas party.

Nortel said today that the GSM auction would give bidders time to assess what is on offer.

"The proposed sale process will provide a timeline for identifying the successful bidder for our valuable GSM/GSM-R assets," said Pavi Binning, chief restructuring officer at Nortel.

"The process is expected to result in a formal agreement with a buyer. We have seen interest in this business during extensive initial discussions."

Graham Richardson, general manager for the GSM/GSM-R business at Nortel, added: "This approach will enable the industry to continue to benefit from Nortel-created technology, our highly-skilled employee base, our know-how and our leading-edge innovation. We remain committed to serving our customers without interruption through this process."

Gartner analyst Steve Blood suggested that, although the sale does not leave Nortel with much business, it will help to pay off some of its debts.

"It seems that Nortel is holding on to its patents. Its investment in R&D historically has been huge, and it is certainly patent rich," he said.

"Perhaps it will become just a patent house with few assets. Certainly its new choice of head office accommodation next to the airport is an indication of lowering operational costs significantly.

"That said, [accountancy firm] Ernst & Young is set on extracting as much money as possible for the creditors, and that could include selling everything. It depends on the capital value of what's left."

Prospective GSM auction bidders must submit offers by 5 November, and the winner will be announced on 9 November.

Copyright ©v3.co.uk


Nortel to auction off GSM business
 
 
 
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