Nortel may have sought bankruptcy advice


Nortel may have sought bankruptcy advice

Alex Scroxton

Troubled Canadian communications giant Nortel has hit back at its critics after reports emerged that the vendor was seeking legal advice ahead of filing for bankruptcy protection.

According to the Wall Street Journal, which cited sources familiar with the situation, Nortel is in discussions with its lawyers to explore a protection scenario in case its multi-million dollar restructuring plan falls through.

It also reported that the company may have sought a bail-out from the Canadian government, itself in turmoil over a stalled no-confidence vote.

In a statement circulated this morning, Nortel said it remained a "viable partner for the long term".

The statement continued: "We have no debt maturity until 2011, and we are preserving and strengthening our position.On 10 November, we put in place an aggressive plan to bring down costs by $400million with a minimum level of cash outlay. The goals we laid out have not changed.Our commitment is to remain an innovation-driven organization - delivering value to our customers for the long term."

Last week Nortel quietly canned its services wing as part of the restructure announced in November. As previously reported by MicroScope Nortel is moving to what it describes as a "vertically integrated business structure" that will see enterprise customers and channels handled by a dedicated unit while service providers will be served by the Carrier and Metro Ethernet Networks units.

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