While the Federal Trade Commission has okayed the sale of bankrupt Nortel Networks' Long Term Evolution (LTE) and CDMA assets, one of Nortel's largest creditors, MatlinPatterson, plans to submit a competing proposal that would see a restructuring of Nortel around its wireless asset.
MatlinPatterson said in a statement that it wanted to keep the company's inherent value instead of accepting what it called a "fire sale" of Nortel's core asset followed by a liquidation of the entire company.
NSN is buying Nortel's LTE and CDMA businesses for $650 million, which is regarded as a steal. Nortel's CDMA business alone drove profits for the company, and it earned about $700 million a year for the vendor.
MatlinPatterson has experience restructuring financially troubled companies. It restructured WorldCom in the 1990s. The creditor wants to structure Nortel so that its wireless assets are the core of a smaller company. It hasn't released a formal strategy yet. MatlinPatterson said it plans to outbid NSN and provide "a superior outcome for the company and all of its constituencies."
Nortel is headed into an auction later this month where bidders will decide the company's ultimate fate. Bids for Nortel are due July 21 and the bankruptcy auction date is set for July 24 in New York City. As the "stalking horse bidder," Nokia Siemens has the ability to set the floor price for bids and match any higher offers for Nortel's businesses. MatlinPatterson plans to rally other Nortel creditors to submit a competing bid.
For more:
- check out Wireless Week
- see Reuters
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