Nortel Networks Corp. (TSX:NT) is seeking advice about possible bankruptcy protection, media reports said Wednesday.
The Wall Street Journal report comes while the company, whose stock outlook was cut to zero by one analyst last month, is seeking financial assistance from the federal government.
The unnamed report said that Nortel isn't ready to declare bankruptcy imminently, however. Rather, it said the company's begun seeking the advice of various professionals for advice on how to handle the next few quarters.
The company denied it was in such serious financial straits. "There are those who fuel negative speculation, but there are many more who believe that Nortel has put in place the necessary plans to strengthen our financial footing and reset our cost base ... Nortel is a viable partner for the long term," the company said in a statement to OBJ.
Nortel said that Standard & Poor had recently reaffirmed the company's credit rating, adding that the telecommunications giant should be able to sustain liquidity for the next 12 to 18 months.
"Nortel is a viable partner for the long term," the company said. "On Nov. 10, we put in place an aggressive plan to bring down costs by $400 million with a minimum level of cash outlay.
"The goals we laid out on Nov. 10 have not changed. We remain focused on executing a significant shift to our operating model and cost base to reflect the economic environment that we are now in. Our commitment is to remain an innovation-driven organization - delivering value to our customers for the long term."
Nortel shares had plummeted more than 20 per cent by mid-morning, where they sat at 51 cents at 10:38 a.m. eastern time
The Wall Street Journal report comes while the company, whose stock outlook was cut to zero by one analyst last month, is seeking financial assistance from the federal government.
The unnamed report said that Nortel isn't ready to declare bankruptcy imminently, however. Rather, it said the company's begun seeking the advice of various professionals for advice on how to handle the next few quarters.
The company denied it was in such serious financial straits. "There are those who fuel negative speculation, but there are many more who believe that Nortel has put in place the necessary plans to strengthen our financial footing and reset our cost base ... Nortel is a viable partner for the long term," the company said in a statement to OBJ.
Nortel said that Standard & Poor had recently reaffirmed the company's credit rating, adding that the telecommunications giant should be able to sustain liquidity for the next 12 to 18 months.
"Nortel is a viable partner for the long term," the company said. "On Nov. 10, we put in place an aggressive plan to bring down costs by $400 million with a minimum level of cash outlay.
"The goals we laid out on Nov. 10 have not changed. We remain focused on executing a significant shift to our operating model and cost base to reflect the economic environment that we are now in. Our commitment is to remain an innovation-driven organization - delivering value to our customers for the long term."
Nortel shares had plummeted more than 20 per cent by mid-morning, where they sat at 51 cents at 10:38 a.m. eastern time
