Nortel Networks Corporation announced that Guangdong Nortel Telecommunication Equipment (“GDNT”), a Chinese joint venture between Nortel Networks Limited, Nortel China Limited and certain third parties, has entered into an asset sale agreement with Ericsson (China) Communications Company Ltd. (“Ericsson”) for the sale of substantially all of the assets of GDNT for a purchase price of approximately U.S. $50 million in cash, subject to certain purchase price adjustments. Nortel subsidiaries Nortel Networks Limited and Nortel China Limited together own 62 percent of GDNT.
Nortel will work diligently with Ericsson and the other shareholders of GDNT to close the sale in the first quarter of 2011. The agreement is subject to regulatory approval and other conditions.
All of the GDNT employees will be offered employment with Ericsson.
“This sale is a milestone in that it is the last of Nortel’s significant business divestitures, which sales have preserved both Nortel
Nortel Networks Corporation announced that it, its principal operating subsidiary Nortel Networks Limited (NNL), and certain of its other subsidiaries, including Nortel Networks Inc. and Nortel Networks UK Limited (in administration), have concluded a successful auction of substantially all of the assets of Nortel’s Multi Service Switch businesses globally. Telefonaktiebolaget LM Ericsson (“Ericsson”) has emerged as the winning bidder with a purchase price of US$65 million.
Under the terms of the agreements, Ericsson’s purchase includes substantially all assets of the MSS business globally including the associated Data Packet Network (DPN) and Services Edge Router (Shasta) product groups. These agreements also include substantially all customer contracts and certain intellectual property related to the MSS business.
The sale is subject to relevant court and regulatory approvals, including Canadian and U.S. court approvals. Nortel will work diligently with Ericsson to close the sale expeditiously, subject to the timing of regulatory required approvals.
Substantially all MSS employees will have the opportunity to continue their employment with Ericsson, including those in certain EMEA jurisdictions who will transfer to Ericsson by operation of law. The sale is also subject to certain regulatory approvals, information and consultation with employee representatives and/or employees in certain EMEA jurisdictions, other customary closing conditions and certain post-closing purchase price adjustments.
Commenting on the announcement, John Luszczek, General Manager of Nortel’s MSS business said: “Today
Nortel Networks Corporation [OTC: NRTLQ] announced that it, its principal operating subsidiary Nortel Networks Limited (“NNL”) and its other Canadian subsidiaries that filed for creditor protection under the Companies’ Creditors Arrangement Act have obtained an order from the Ontario Superior Court of Justice (“Canadian Court”) further extending, to January 29, 2010, the stay of proceedings that was previously granted by the Canadian Court. The purpose of the stay of proceedings is to provide stability to the Nortel companies to finalize funding arrangements and continue with their divestiture and other restructuring efforts.
Nortel Networks Corporation (OTCBB:NRTLQ) announced that in light of ongoing discussions with interested parties, it has decided to not hold the previously scheduled auction today in relation to the sale of its global Optical Networking and Carrier Ethernet businesses. Qualified bidders are now required to submit offers by November 17, 2009. The Company expects to provide a further update on the auction process and sale of these businesses next week.
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