15/01/09
TORONTO (Reuters) - Nortel Networks Corp, North America's biggest telephone equipment maker, filed for bankruptcy on Wednesday, hoping to save a once highflying business whose decade-long decline has accelerated with the global economic crisis.
Nortel, who also supply BT with their range of telephone systems for SME's in the UK have committed to a £40m investment in the 2012 games in London.
No Overline customers will be affected by this bankruptcy as Overline only supply equipment from financially stable companies such as Avaya and Panasonic.
The filing marks a crucial stage in the slow deterioration of one of Canada's most prominent companies. Nortel, a stock market darling before the tech bubble burst and still one of the country's largest employers, has struggled for years in an industry that has changed radically since Nortel's heyday in the late 1990s.
Analysts said Nortel will have to shed assets -- likely at rock-bottom prices -- in its fight for survival. The company will likely cease to exist in its current form, they said.
A sharp slowdown in many of Nortel's major markets, especially the United States, has exacerbated its long-standing problems competing with low-cost rivals. The company warned last month that its business was under increased pressure, and its cash position and liquidity were deteriorating.