Nortel agrees to sell enterprise unit to Avaya
By Pav Jordan and Euan Rocha
TORONTO (Reuters) - Bankrupt Nortel Networks, once one of the world's biggest technology companies, said on Monday it has agreed to sell its enterprise unit, which builds networks for companies, to Avaya Inc for $475 million but said higher bids may emerge.
The company, which in its heyday employed more than 90,000 people and could sway entire stock markets in Toronto and New York with just a blip in its share price, also plans to sell its third remaining unit before the end of the quarter, the final chapter for what was once a Canadian icon.
"With the announcement today, we have stalking horse agreements for the two largest businesses within Nortel and we are acting with a great level of speed and resolve to be able to conclude all of the other stalking horse agreements," Nortel President and Chief Executive Mike Zafirovski told Reuters.
"I believe that many of those will be completed and announced before this quarter is over."
Stalking horse deals are designed to test the market, typically setting the floor for bidding, and make up the lead bid at a bankruptcy auction.
"We certainly believe there are a number of other interested parties that will take advantage of the stalking horse process to come in and bid for these assets," Zafirovski said by telephone.
Toronto-based Nortel, North America's biggest maker of telephone equipment, now employs some 30,000 workers and has been in steady decline for much of the past decade.
The company filed for bankruptcy protection in Canada and the United States in January, blaming the economic crisis for derailing a turnaround effort that began in 2005. Continued...