Nortel explores bankruptcy: report
Nortel Networks Corp has sought legal advice to study a bankruptcy protection scenario in the event that its restructuring plan fails and has also been exploring potential assistance from the Canadian government, the Wall Street Journal reported.
On the subject of legal advice for studying a bankruptcy scenario, the WSJ cited people familiar with the situation, while on the potential government aid scenario, it cited a person familiar with the situation.
Nortel's spokesperson said no bankruptcy filing was imminent though the Toronto-based company has engaged several advisors to plan ahead, the newspaper reported.
In an email sent to the Financial Post, Nortel said it is a "viable partner for the long term" and said it continues to pursue an existing plan to better serve customers and eliminate costs: "Nortel is hard at work reshaping the business to even better serve our customers. 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. Even just two weeks ago, Standard & Poor's reaffirmed our credit rating stating "Nortel should be able to sustain adequate levels of liquidity in the next 12-18 months."
Nortel, North America's biggest maker of telephone equipment has lost billions of dollars and cut tens of thousands of jobs since the technology bubble burst at the beginning of this decade.
The company has been unable to recover since then, with its problems exacerbated by the global economic slowdown.
RBC Capital Markets analyst Mark Sue said in November the company faced significant liquidity concerns, with bankruptcy a distinct possibility before 2011.
© Thomson Reuters 2008, with files from David George-Cosh
Nortel Networks Corp has sought legal advice to study a bankruptcy protection scenario in the event that its restructuring plan fails and has also been exploring potential assistance from the Canadian government, the Wall Street Journal reported.
On the subject of legal advice for studying a bankruptcy scenario, the WSJ cited people familiar with the situation, while on the potential government aid scenario, it cited a person familiar with the situation.
Nortel's spokesperson said no bankruptcy filing was imminent though the Toronto-based company has engaged several advisors to plan ahead, the newspaper reported.
In an email sent to the Financial Post, Nortel said it is a "viable partner for the long term" and said it continues to pursue an existing plan to better serve customers and eliminate costs: "Nortel is hard at work reshaping the business to even better serve our customers. 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. Even just two weeks ago, Standard & Poor's reaffirmed our credit rating stating "Nortel should be able to sustain adequate levels of liquidity in the next 12-18 months."
Nortel, North America's biggest maker of telephone equipment has lost billions of dollars and cut tens of thousands of jobs since the technology bubble burst at the beginning of this decade.
The company has been unable to recover since then, with its problems exacerbated by the global economic slowdown.
RBC Capital Markets analyst Mark Sue said in November the company faced significant liquidity concerns, with bankruptcy a distinct possibility before 2011.
© Thomson Reuters 2008, with files from David George-Cosh
