Nortel Networks wants to sell its 50-percent stake in the networking joint venture it has with LG Electronics, according to a report in the Financial Times. The bankrupt telecom equipment maker hired Goldman Sachs to find a buyer for its stake, according to the report, which cited unnamed sources familiar with the matter. Goldman Sachs and Nortel declined to comment on the speculation.
However, Nortel told the FT that it is continuing to work with LG to ensure the future success of the partnership. "LG-Nortel has enjoyed significant growth since its formation and is a market leader in Korea and select international markets," the company said. "Most importantly, LG-Nortel is a separate and solvent entity with no debt and a strong cash balance."
The report said that the sale could value the partnership at $1 billion, which would provide some much-needed funding to cash-strapped Nortel. LG-Nortel was formed in 2005 and had revenues last year of around $1 billion.
Separately, Nortel will be able to remain in bankruptcy for another three months; Ontario Superior Court Judge Geoffrey Morawetz yesterday granted Nortel's request for the extension, which now stretch to July 30. The company filed for bankruptcy in mid-January. Nortel posted a $2.14 billion loss in the fourth quarter and a $5.8 billion loss for all of 2008.
For more:
- see this FT article
- see this Bloomberg News article
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