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Nortel Wins Court Approval to Liquidate Enterprise Networking Division

2:18 pm on August 4, 2009 | Category: Business, Corporate

Bankrupt Canadian telecom icon, Nortel Networks, has received court approval to auction off its enterprise networking business, as the next phase of its plan to liquidate assets.

Nortel, which filed for bankruptcy protection in January, has already received a “stalking horse” bid from Avaya Inc., which is willing to pay $475 million for the enterprise division. This offer will set the floor for the auction, set to take place on September 11.

Last month, Nortel successfully auctioned off its wireless networking business for $1.13 billion. Sweden-based Ericsson made the winning bid, beating Nokia Siemens’ stalking horse offer of $650 million. (The deal is expected to close later this year, pending government approval.)

Nortel’s lawyers expect the upcoming auction to be far more complicated than the sale of the wireless division, due to the large number of clients and contracts involved. The enterprise business has been languishing in recent months as many clients have declined to renew their contracts on news of Nortel’s bankruptcy. For this reason, the company is undoubtedly hoping to liquidate the division sooner rather than later.

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