Nortel

Nortel Files for Bankruptcy (Summary)

            Nortel Networks Corp, North America’s largest telephone equipment maker, filed for Chapter 11 Bankruptcy on Wednesday, Jan. 14. On Wednesday, Nortel closed at a market price of 12 Canadian cents, or 1.2 cents after adjusting for a stock consolidation. Nortel’s shares peaked at 124.50 Canadian dollars in July 2000 in trading on the Toronto Stock Exchange.

            The bankruptcy filing came a day before the Toronto-based company was due to make an interest payment of about $107 million. As of Sept. 30, Nortel’s debt amounted to $6.3 billion, including adjustments for operating leases, pension deficits and other items. It had $2.3 billion in cash as of that date and the company has about $1 billion in bonds that come due in 2011. Nortel also announced a third-quarter loss of $3.4 billion in November.

            As it stands, Nortel is still a big part of Corporate Canada, with 32,000 employees and major operations in Ottawa. The Canadian government has also pledged to help Nortel come out from this bankruptcy alive, and a government agency agreed to provide C$30 million in short-term financing.

Related Links and Sources

• Nortel Gets Advice From Lazard, Clearly, People Say
• Nortel Seeks Bankruptcy Protection
• Nortel files for bankruptcy, shares plunge
• Nortel faces squeeze as key supplier pulls back
• Nortel gets OK to pay wages, NYSE suspends stock

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