Nortel loses billions on Alteon sale
It has emerged that Nortel has effectively lost the entire value of its Alteon layer 4-7 application delivery switch business after revealing that last Friday's sale of the unit to Israeli comms specialist Radware netted it just $17.6m (£12m).
Nortel picked up Alteon during the heyday of the dotcom boom for $7.8bn in stock in a move planned to help it stand up to Cisco.
But according to documents relating to the sale filed by Nortel in a US bankruptcy court, the value of the Alteon assets had plummeted since Nortel filed for protection in January, and was likely to drop further.
Nortel is seeking a fire sale of the Alteon business so that it can concentrate on shoring up its remaining units against harrying attacks from its rivals, many of whom have been trying to attract the attention of Nortel's resellers and customers.
However, the Radware sale is not a done deal as under the terms of its agreements Nortel is still obliged to offer Alteon for sale at auction next month.
Radware CEO Roy Zisapel has committed his firm to supporting Alteon customers as part of the sale, which could also see Nortel effectively become an OEM reseller for the product line.