TORONTO--(Marketwire - July 28, 2009) - Nortel(1) Networks
Corporation (OTCBB: NRTLQ) announced that at a joint hearing today,
it, its principal operating subsidiary Nortel Networks Limited, and
certain of its other subsidiaries including Nortel Networks Inc.,
obtained orders from the Ontario Superior Court of Justice and the
United States Bankruptcy Court for the District of Delaware approving
the sale agreement with Telefonaktiebolaget LM Ericsson ("Ericsson")
for substantially all of Nortel's CDMA business and LTE Access assets
for a purchase price of US$1.13 billion.
As announced on July 25, 2009, under the asset sale agreement,
Ericsson will purchase substantially all of Nortel's CDMA business
which is the second largest supplier of CDMA infrastructure in the
world, and substantially all of Nortel's LTE Access assets giving it
a strong technology position in next generation wireless networks.
Also as part of this agreement, a minimum of 2,500 Nortel employees
supporting the CDMA and LTE Access business will receive offers of
employment from Ericsson. Completion of the sale is subject to
regulatory and other customary closing conditions, and the purchase
price is subject to certain post-closing adjustments. Nortel will
work diligently with Ericsson to close the sale later this year.
About Nortel
Nortel delivers communications capabilities that make the promise of
Business Made Simple a reality for our customers. Our next-generation
technologies, for both service provider and enterprise networks,
support multimedia and business-critical applications. Nortel's
technologies are designed to help eliminate today's barriers to
efficiency, speed and performance by simplifying networks and
connecting people to the information they need, when they need it.
For more information, visit Nortel on the Web at www.nortel.com. For
the latest Nortel news, visit www.nortel.com/news.
Certain statements in this press release may contain words such as
"could", "expects", "may", "should", "will", "anticipates",
"believes", "intends", "estimates", "targets", "envisions", "seeks"
and other similar language and are considered forward-looking
statements or information under applicable securities laws. These
statements are based on Nortel's current expectations, estimates,
forecasts and projections about the operating environment, economies
and markets in which Nortel operates. These statements are subject to
important assumptions, risks and uncertainties that are difficult to
predict, and the actual outcome may be materially different. Further,
actual results or events could differ materially from those
contemplated in forward-looking statements as a result of the
following (i) risks and uncertainties relating to Nortel's Creditor
Protection Proceedings including: (a) risks associated with Nortel's
ability to:
stabilize the business and maximize the value of its businesses;
obtain required approvals and successfully consummate pending and
future divestitures; successfully conclude ongoing discussions for
the sale of Nortel's other assets or businesses; develop, obtain
required approvals for, and implement a court approved plan; resolve
ongoing issues with creditors and other third parties whose interests
may differ from Nortel's; generate cash from operations and maintain
adequate cash on hand in each of its jurisdictions to fund operations
within the jurisdiction during the Creditor Protection Proceedings;
access the EDC Facility given the current discretionary nature of the
facility, or arrange for alternative funding; if necessary, arrange
for sufficient debtor-in-possession or other financing; continue to
have cash management arrangements and obtain any further required
approvals from the Canadian Monitor, the U.K. Joint Administrators,
the French Administrator, the Israeli Joint Administrators, the U.S.
Creditors' Committee, or other third parties; raise capital to
satisfy claims, including Nortel's ability to sell assets to satisfy
claims against us; maintain R&D investments; realize full or fair
value for any assets or business that are divested; utilize net
operating loss carryforwards and certain other tax attributes in the
future; avoid the substantive consolidation of NNI's assets and
liabilities with those of one or more other U.S. Debtors; attract and
retain customers or avoid reduction in, or delay or suspension of,
customer orders as a result of the uncertainty caused by the Creditor
Protection Proceedings; maintain market share, as competitors move to
capitalize on customer concerns; operate Nortel's business
effectively in consultation with the Canadian Monitor, and work
effectively with the U.K. Joint Administrators, French Administrator
and Israeli Joint Administrators in their respective Administration
of the EMEA businesses subject to the Creditor Protection
Proceedings; actively and adequately communicate on and respond to
events, media and rumors associated with the Creditor Protection
Proceedings that could adversely affect Nortel's relationships with
customers, suppliers, partners and employees; retain and incentivize
key employees and attract new employees, as may be needed; retain, or
if necessary, replace major suppliers on acceptable terms and avoid
disruptions in Nortel's supply chain; maintain current relationships
with reseller partners, joint venture partners and strategic alliance
partners; obtain court orders or approvals with respect to motions
filed from time to time; resolve claims made against Nortel in
connection with the Creditor Protection Proceedings for amounts not
exceeding Nortel's recorded liabilities subject to compromise;
prevent third parties from obtaining court orders or approvals that
are contrary to Nortel's interests; reject, repudiate or terminate
contracts;
and (b) risks and uncertainties associated with: limitations on
actions against any Debtor during the Creditor Protection
Proceedings; the values, if any, that will be prescribed pursuant to
any restructuring plan to outstanding Nortel securities and, in
particular, that Nortel does not expect that any value will be
prescribed to the NNC common shares or the NNL preferred shares in
any such plan; the delisting of NNC common shares from the NYSE; and
the delisting of NNC common shares and NNL preferred shares from the
TSX; and (ii) risks and uncertainties relating to Nortel's business
including: the sustained economic downturn and volatile market
conditions and resulting negative impact on Nortel's business,
results of operations and financial position and its ability to
accurately forecast its results and cash position; cautious capital
spending by customers as a result of factors including current
economic uncertainties; fluctuations in foreign currency exchange
rates; any requirement to make larger contributions to defined
benefit plans in the future; a high level of debt, arduous or
restrictive terms and conditions related to accessing certain sources
of funding; the sufficiency of workforce and cost reduction
initiatives; any negative developments associated with Nortel's
suppliers and contract manufacturers including Nortel's reliance on
certain suppliers for key optical networking solutions components and
on one supplier for most of its manufacturing and design functions;
potential penalties, damages or cancelled customer contracts from
failure to meet contractual obligations including delivery and
installation deadlines and any defects or errors in Nortel's current
or planned products; significant competition, competitive pricing
practices, industry consolidation, rapidly changing technologies,
evolving industry standards, frequent new product introductions and
short product life cycles, and other trends and industry
characteristics affecting the telecommunications industry; any
material, adverse affects on Nortel's performance if its expectations
regarding market demand for particular products prove to be wrong;
potential higher operational and financial risks associated with
Nortel's international operations; a failure to protect Nortel's
intellectual property rights; any adverse legal judgments, fines,
penalties or settlements related to any significant pending or future
litigation actions; failure to maintain integrity of Nortel's
information systems; changes in regulation of the Internet or other
regulatory changes; and Nortel's potential inability to maintain an
effective risk management strategy.
For additional information with respect to certain of these and other
factors, see Nortel's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2009 and Annual Report on Form 10-K for the year
ended December 31, 2008 and other securities filings with the United
States Securities and Exchange Commission. Unless otherwise required
by applicable securities laws, Nortel disclaims any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
(1)Nortel, the Nortel logo and the Globemark are trademarks of Nortel
Networks.
Contacts:
Nortel
Karen Monaghan
613-763-1133
kmonagha@nortel.com
Nortel
Jay Barta
972-685-2381
jbarta@nortel.com
www.nortel.com
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