Nortel, a fallen Canadian icon, starts asset sales

Fri Jul 24, 2009 6:11pm EDT
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By Pav Jordan

TORONTO (Reuters) - Nortel Networks Corp and bidders for its wireless division were sequestered on Friday in a New York law office as the company, once a symbol of Canada's technological prowess, moved to complete the first stage of its own dismantling.

The court-supervised auction, which comes after a decade of decline for Nortel, involves its prized CDMA and LTE wireless technology assets, the latter of which includes technology coveted by the world's leading telecom-equipment makers.

"The carcass of one of the leading high flyers for much of the last decade and a half is now up for grabs, and to the victor go the spoils," said Carmi Levy, an independent technology analyst.

No winner in the U.S. court-supervised auction had been announced as of late Friday afternoon.

Levy said competing bids, reviewed by the debtor in consultation with the company's creditors and creditors committee, are likely complex and require time to assess.

"I'm going to presume that the court is taking its time ... to make sure that all I's are dotted and all T's are crossed and nothing is missed," he said.

The lead-up to the asset sale was quiet, with apparently little bidder interest until recent days, when European players entered the fray and BlackBerry maker Research In Motion said it wanted the wireless business for itself. RIM even told the Canadian government that keeping the technology in Canadian hands was vital to national security.

In its heyday, Nortel was the most heavily weighted stock on the Toronto Stock Exchange, with a market capitalization of more than $250 billion. It filed for bankruptcy protection in January after years of job cuts, cost-cutting and restatements of its financial results.   Continued...

<p>The Nortel logo is seen outside their head office in Toronto May 6, 2008. REUTERS/Mike Cassese</p>