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Nortel books $649m loss after pension charges

Alex Scroxton

Nortel's rump operation has posted net third quarter sales of $85m (£52.8m), down 90.1% year-on-year as a result of business divestitures in the past 12 months.

At the same time the firm sank to a net loss of $649m after incurring charges of $490m related to the winding up of its final salary pension scheme in Canada.

The bankrupt networking vendor is also currently up against the UK Pensions Regulator, which wants to recover up to £2.1bn to cover the pensions of around 40,000 Nortel workers. A hearing in this case is due later this month.

Its remaining sales came mostly from residual contracts relating to a few recently-divested units, including its MSS business, which was sold to Ericsson in September.

Nortel claims to have generated $3.2bn in proceeds to pay off its creditors since going under in 2009, and has secured the fuutre of 13,000 jobs worldwide.

Note that the results as posted now exclude Nortel's EMEA subsidiaries, which have been accounted for as an investment since 1 June 2010.

The firm remains under Chapter 11 protection.


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