Nortel yesterday filed for bankruptcy in Canada and the US, and announced it expects several of the company's EMEA subsidiaries to follow suit.
The global financial crisis has worsened Nortel's already perilous financial position, the Canadian vendor announced.
"Nortel must be put on a sound financial footing once and for all," said Nortel President and CEO Mike Zafirovski, adding that the bankruptcy filings were "imperative."
Nortel shares on the Toronto Stock Exchange plummeted 69% following the announcement down to $0.12.
Its Asian affiliates, including LG Nortel and in the Caribbean and Latin America, as well as the Nortel Government Solutions business, are not included in these proceedings.
A Nortel spokesman told telecomasia.net that the company's Asian operations would "continue without interruption"
"Over the next several months, we will work to restructure our business for the future. Like many companies that have gone this route, we expect to emerge a more effective and valuable partner for the long term," he said.
The company has around $2.4 billion in cash on hand to fund these operations.
According to Bloomberg, at its peak in the tech boom in 2000 Nortel was worth an estimated $250 billion. But as of September 30 the company was $6.3 billion in debt, with liabilities totalling $12 billion.