Nortel creditors, suppliers oppose $650m asset sale
Nortel creditors and suppliers have filed objections to the stricken vendor’s sale of wireless assets to rival Nokia Siemens.
Nokia Siemens last week agreed to pay $650 million for most of Nortel’s CDMA and LTE assets.
However Nortel bondholder and creditor MatlinPatterson has complained that the deal placed conditions that could prevent other bids from emerging, Reuters reports.
“These restrictions serve only to permit Nokia-Siemens to effectively lock down these valuable core assets,” it said in a filing to the US Bankruptcy Court in Delaware.
Nortel CEO Mike Zafirovski has said the company, which filed for Chapter 11 bankruptcy protection in January, is in talks with other potential buyers about further asset sales.
But MatlinPatterson says the bidding process effectively rules out the possibility of selling the company as a “going concern”.
It has begun discussions with other creditors and is considering supporting a Chapter 11 reorganization plan in lieu of the proposed sale.
MatlinPatterson also said it is seeking an extension of the sale process by two weeks.
Singapore-based Flexrtonics, Nortel’s single largest supplier, has also objected, saying it is concerned its contractual rights might be affected by the asset sale.
Separately, a group of unsecured creditors says the proposed bidding process is unfair, Reuters said.
“Certain aspects of the bidding procedures serve to stifle rather than encourage active bidding at auction,” they said.