Toronto, Sep 5 (Inditop.com) Toronto-based Nortel, which is selling its businesses to pay off its creditors, will auction its second biggest division next Friday.
The enterprise unit that makes network equipment will be auctioned under court supervision.
US-based Avaya Inc. is one of the bidders with an offer of $475 million.
Friday was the last day to place bids.
The 124-year-old Canadian icon has been operating under bankruptcy protection since January after suffering losses of $5 billion last year.
On July 28, Nortel sold its next-generation wireless business to Sweden’s Ericsson under a court-supervised auction for $1.13 billion.
But the deal is being reviewed after BlackBerry maker Research In Motion (RIM) and political parties pressured the Canadian government not to let “sensitive technology” falls into foreign hands.
Now Nortel’s enterprise unit that makes network equipment – routers, IP phones, switches and other security products – for big corporations goes under the hammer next Friday under court supervision.
The media here says that apart from Avaya, there is another bidder which could be either Berlin-based Siemens Enterprise Communications or New York-based private equity firm MatlinPatterson Global Advisers LLC.
Like the sale of Nortel’s next-generation wireless business in July, the auction of the second biggest division will also have to be approved by bankruptcy courts in the US and Canada.
A fabled Canadian corporate brand, Nortel once accounted for almost one third of the Toronto Stock Exchange (TSX).
Its downward spiral began with the dotcom bust of 2000, with its market capitalisation plummeting from almost $400 billion just before the dotcom bust in September 2000 to $5 billion within two years. Its stock sank from $124 to $0.47.
An accounting scandal in 2004 further weakened the telecom giant.
In 2006, Nortel had to pay $2.5 billion to settle shareholder class actions.
The global economic slowdown that started last year was the last straw for Nortel. At its height, Nortel employed more than 90,000 people worldwide.
