Nortel is hoping that the $650 million cash injection from the sale of its wireless divisions to Nokia Siemens will help it return from Chapter 11.
The ailing network giant Nortel continues its struggle to survive, this time by raising money from the sale of its wireless know-how to Nokia Siemens Networks.
As reported over on CNet
, the company – which entered Chapter 11 bankruptcy protection proceedings back in January
of this year – is looking to offload its mobile 'phone oriented CDMA and 4G LTE (Long Term Evolution) technologies to Nokia Siemens Networks, one of the largest providers of mobile infrastructure technologies in the world.
Nokia Siemens' chief executive officer, Simon Beresford-Wylie, said in a statement that the deal would provide “an important strategic opportunity for Nokia Siemens Networks to strengthen its position in two keys areas, North America and LTE, at a price that makes good economic sense.
The deal will see Nortel getting a $650 million (£394 million) cash injection which it desperately needs in order to stay afloat. In turn, Nokia Siemens gets rights to the CDMA and LTE technology Nortel has spent so many years developing.
The news for workers in these parts of Nortel is reassuring: Nokia Siemens has agreed to take on around 2,500 employees – representing a “significant portion
” of the workforce in this part of Nortel – across the US, Canada, Mexico, and China. Nortel's chief executive Mike Zafirovski claimed this represented the company's hope to “preserve employment to the greatest extent possible.
The move is likely to be the start of a range of sell-offs for the company as Nortel looks to dig itself out of a financial hole before the provisions of its Chapter 11 protection expire.
Do you think Nortel will be able to survive in any way if it continues to sell of major parts of its business, or is the company making the best possible effort to weather the storm in which it finds itself? Share your thoughts over in the forums