Foreign bids for Nortel may be welcome: Canada

Tue May 12, 2009 4:24pm EDT
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OTTAWA (Reuters) - A foreign buyer is welcome to bid on Nortel Networks Corp as long as any such offer passes national security tests and is of net benefit to Canada, Industry Minister Tony Clement said on Tuesday.

"If a foreign company, for instance, wishes to purchase all or part of Nortel, then there is a review process through Investment Canada which I certainly cannot prejudge," Clement said in answer to a reporter's question.

"The law states that if there's an issue of national security, then government does have the right to review it on that basis. On other bases, obviously there is a net benefit to Canada test that kicks in at a certain level," he said.

"Other than that, our stance is and should be that Canada should be open for business."

Clement noted that having a foreign company buy Nortel, which is currently under bankruptcy protection, could be the best way "to preserve jobs and opportunity for the future, rather than a liquidation of assets, a tearing up of their plants and a firing of their workers."

He said he was speaking theoretically but those were the choices that typically come about.

The telecom equipment maker filed for bankruptcy protection in January and on Monday reported a 37 percent slide in its first-quarter revenue from a year earlier. It declined comment on Clement's remarks.

(Reporting by Randall Palmer and Wojtek Dabrowski; editing by Rob Wilson)