Nortel* Networks Corporation [OTC: NRTLQ] announced today that its principal operating subsidiary Nortel Networks Limited (“NNL”) has entered into a share purchase agreement (“Agreement”) with Telefonaktiebolaget LM Ericsson (Publ) (“Ericsson”) for the sale of its 50% plus 1 share interest in LG-Nortel Co. Ltd., the company’s Korean joint venture with LG Electronics Inc. (“LG Electronics”), for a purchase price of US$242 million in cash subject to certain purchase price adjustments.
“Today’s announcement is a positive step forward in securing a sound future for the LG-Nortel business and its valued customers,” said Paul House, Chairman and General Manager, LG-Nortel. “Credit is due to the employees of LG-Nortel who have built this Joint Venture into a world class, profitable business.”
The Agreement is subject to approval of the Ontario Superior Court of Justice as well as satisfaction of customary regulatory and other conditions.
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.
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