| |
The erstwhile global telecom giant, Nortel, has sold off its business for $475 million to its business rival, Avaya Inc. This decision was taken as it had declared that it would liquidate itself last month.
The Toronto-based telecom company said on Monday that it was selling its Enterprise Solutions unit to its US rival in a 'stalking horse' agreement that keeps the options for future bidders open.
Last month, the 127-year-old Canadian company had entered into a deal with Nokia Siemens to sell all its entire wireless business for $650 million, preserving 800 top Nortel jobs in Canada. Monday's deal is reportedly said to be similar to the deal with Nokia Siemens to preserve local jobs.
"We continue to be fully focused on running our operations and continuing to serve our customers while actively engaged in the sale of our businesses. We have determined that the sale of our businesses maximises value while preserving innovation platforms, customer relationships and jobs to the greatest extent possible," said Nortel president and CEO Mike Zafirovski.
He said the outgoing company was in discussions with interested parties for selling its other businesses.
Nortel, which has been in business since 1882, had to file for bankruptcy after suffering losses to the tune of $5 billion last year. Even as its top bosses announced plans to restructure the company, a further loss of $507 million in the first quarter of this year sank it further.
The telecom giant's accumulated problems - from the bubble burst to an internal accounting scandal to the current meltdown - forced it to seek bankruptcy protection in the US and Canada this January.
Its bankruptcy plea was accepted ahead of its $107 million interest payment in January. At its peak, Nortel employed 90,000 people worldwide.
