Nortel shares fell another 20 per cent yesterday on stories that it has hired lawyers to explore filing for bankruptcy if its latest restructuring fails.

The telecoms equipment maker has watched its shares fall from $15 at the start of the year to just 49 cents today.

The company has suffered as telcos have cut back spending or switched to cheaper suppliers. It also has a big debt to deal with - something which is getting much more expensive, especially with its share price in freefall.

Nortel said that the credit crisis was adding to its woes in September as customers cut back spending more than expected.

Mike Zafirovski, Nortel's president and CEO, said: "In September, we signaled our view that a slowdown in the market was taking place. In the weeks since, we have seen worsening economic conditions, together with extreme volatility in the financial, foreign exchange and credit markets globally, further impacting the industry, Nortel and its customers."

He said the company would take further action to cut costs; it will cut 1,300 positions and freeze salaries.

Revenue in the third quarter fell 14 per cent to $2.32bn which it blamed on the economy, competitive pressure and reduced spending by some key carriers. It made a net loss of $3.4bn in the third quarter thanks to write-offs and restructuring costs.

And of course Nortel has been here before - posting a $19.4bn loss in one quarter of 2001. .The company has been around since 1895 when it helped create Canada's phone network

It expects revenue for the full year to be near the bottom of the previously announced range.

Full statement is here. ®

Related stories

• Nortel confirms fire sale (12 May 2009)
• Bidders 'plot Nortel break up' (9 April 2009)
• Nortel staff sacked without redundancy payout (31 March 2009)
• Nortel to cut 3,200 workers (25 February 2009)
• Nortel UK goes into administration to save itself (15 January 2009)
• Nortel begs for bankruptcy protection (14 January 2009)
• Nortel losses $3.4bn in Q3 (10 November 2008)
• Nortel forced to reforecast, put unit on block (17 September 2008)
• Nortel pays $35m to end fraud probe (16 October 2007)