Nortel Networks has filed for bankruptcy protection in a Canadian court as the vendor feels the impact from from the slumping economy. The vendor said it expects to continue its normal day-to-day operations as it restructures its debt.
Nortel has been struggling since 2005 and has continually made changes to its business to change its financial and market position. But the struggling economy has been too much and has directly impacted its ability to implement its turnaround. Nortel is taking this action now, with a $2.4 billion cash position, to preserve its liquidity and fund operations during the restructuring process.
"Nortel must be put on a sound financial footing once and for all," said Nortel President and CEO Mike Zafirovski. "These actions are imperative so that Nortel can build on its core strengths and become the highly focused and financially sound leader in the communications industry that its people, technology and customer relationships show it ought to be. I am confident that the actions we're announcing today will be the fastest, most effective means to translate our improved operational efficiency, double-digit productivity, focused R&D and technology leadership into long-term success. I want to reaffirm Nortel's dedication to delivering world-class solutions and services to customers."
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