Toronto: Bankrupt telecom equipment maker Nortel Networks Corp has sought court approval to sell certain assets of its Carrier voice over Internet protocol and application solutions business to Genband Inc for USD 282 million, court papers showed.
The Canadian company said on Wednesday Genband is acting as the "stalking horse bidder," setting the floor price for the assets at an auction supervised by the bankruptcy court.
The purchase price is subject to balance sheet and other adjustments estimated at about USD 100 million.
The offer by Texas-based Genband includes the North America, Caribbean and Latin America and Asia Carrier VoIP and Application Solutions business. It also includes an agreement for the sale of substantially all of the assets of the Europe, Middle East and Africa portion of its CVAS business.
Nortel expects to seek US and Canadian court approvals for the bidding procedures, including a bid deadline and tentative auction date, next month.
It said a "significant amount" of the employees in the operations being sold would retain their jobs with Genband.
Nortel, once North America's biggest telecommunications equipment company, filed for bankruptcy protection last January. Rather than attempting to restructure, it is auctioning off its assets in an attempt to pay back debtholders.
Earlier this month, bankruptcy courts cleared the way for Ciena Corp to acquire Nortel's optical networking and carrier ethernet business for USD 769 million.
Network equipment maker Ciena said it expects the deal -- which will double its size and increase its debt load -- to close in the first quarter of 2010.
Ciena trumped an offer by Nokia Siemens and its financial partner, One Equity Partners, with an auction-winning bid of USD 530 million in cash and USD 239 million in convertible securities.
Last month, Sweden's Ericsson won an auction for Nortel's wireless assets, including the CDMA wireless technology used in North America and in the emerging LTE high-speed wireless technology.
The case is Nortel Networks Inc, et al, No. 09-10138 in the US Bankruptcy Court for the District of Delaware.
Late on Wednesday, Nortel said it and Nortel Networks Limited (NNL), Nortel Networks Inc. (NNI), and certain of its other Canadian and US subsidiaries that have filed for creditor protection in Canada or the US entered into a final Canadian Funding and Settlement Agreement.
The agreement provides for the settlement of certain inter-company claims, including in respect of amounts determined to be owed by NNL to NNI under Nortel's transfer pricing arrangements for the years 2001 through 2005.
Bureau Report
First Published: Thursday, December 24, 2009, 09:35