Nortel Networks Corporation [OTC: NRTLQ] announced that its principal operating subsidiary, Nortel Networks Limited (NNL), its U.S. subsidiary, Nortel Networks Inc., and its Canadian subsidiary, Nortel Networks Technology Corporation, have completed the sale of the assets of its Carrier Networks business associated with the development of Next Generation Packet Core network components (Next Generation Packet Core Assets) to Hitachi Ltd. for a purchase price of US$10 million. The sale was subject to court approvals in the U.S. and Canada as well as regulatory and other customary closing conditions. These conditions have now been satisfied and the sale was concluded effective today.
Under the agreement, the assets include the Next Generation Serving GPRS Support Node on Advance TeleComputing Architecture (ATCA), the Next Generation Gateway GPRS Support Node on ATCA, the Mobility Manager Element on ATCA, the AGW Serving Gateway on ATCA, the AGW Packet Data Gateway on ATCA, and the Network Element Manager associated with each. These products support the transfer of data over existing wireless networks and the next generation of wireless communications technology. The assets include relevant non-patent intellectual property, equipment and other related tangible assets, as well as a non-exclusive license of certain relevant patents and other intellectual property.
As previously announced, Nortel does not expect that the Company’s common shareholders or the NNL preferred shareholders will receive any value from the creditor protection proceedings and expects that the proceedings will result in the cancellation of these equity interests.
Nortel had previously announced on August 10, 2009 that it was in the process of identifying a principal officer for Nortel Networks Inc. and the other Nortel companies in U.S. Chapter 11 proceedings (U.S. Debtors). Nortel Networks Inc. has entered into an agreement with John Ray who will fill the role of Principal Officer of the U.S. Debtors. In such capacity, John Ray will work with Nortel management, the Canadian Monitor, the Joint Administrators in the U.K. administration proceedings and various retained advisors, in monitoring and providing oversight of the conduct of the businesses of the U.S. Debtors in relation to various matters in connection with the Chapter 11 proceedings. Ray brings extensive experience in financial restructurings and wind downs under Chapter 11 to the role. The appointment of the Principal Officer is subject to U.S. bankruptcy court approval.
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