Feeds

Nortel begs for bankruptcy protection

Operation a success, patient dead

Gartner critical capabilities for enterprise endpoint backup

Nortel, plagued for months by rumours of serious financial problems, has filed for bankruptcy protection or Chapter 11.

The hundred year old Canadian giant only just escaped the same fate in the last downturn in 2001. It posted a loss of $3.4bn for its third quarter, which is bad, but not nearly as bad as the sodding huge $19.6bn it lost in three months of 2001.

Nortel is seeking creditor protection in Canada, the US and Europe to give it a chance to review all its business and restructure its debt.

Mike Zafirowski, president and CEO at Nortel, said: "I am convinced that by choosing this path at this time, we can put Nortel on sound financial footing once and for all." He said the firm was "still very much in business and our commitment to our customers remains unwavering".

He said that day to day business will continue for the company which claims to have $2.4bn in the bank.

Nortel's application will be heard by the Ontario Superior Court of Justice later today. It has already filed for US Chapter 11 protection in Delaware and will make similar applications in Europe. The firm will also ask for certain restrictions on dealing in its shares.

Nortel has also made an agreement with its key supplier Flextronics to maintain inventory.

The full statement is here.

Nortel has made an agreement with Export Development Canada to guarantee continued access to $30m in credit for 30 days - it is hoping to extend this following discussions.

The decision also delays Nortel's payment of $107m in interest payments to bond holders, CBC News reports.

That payment would once have been a piddling amount to a company that was worth in excess of C$350bn at its peak at the turn of the century, employing almost 100,000 people.

Today its headcount is a quarter of that, and its shares were changing hands at C$0.11, giving it a market cap of C$57m itself a catastrophic collapse on its 52 week high of C$14.®

Secure remote control for conventional and virtual desktops

More from The Register

next story
The Return of BSOD: Does ANYONE trust Microsoft patches?
Sysadmins, you're either fighting fires or seen as incompetents now
Microsoft: Azure isn't ready for biz-critical apps … yet
Microsoft will move its own IT to the cloud to avoid $200m server bill
Oracle reveals 32-core, 10 BEEELLION-transistor SPARC M7
New chip scales to 1024 cores, 8192 threads 64 TB RAM, at speeds over 3.6GHz
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
Object storage bods Exablox: RAID is dead, baby. RAID is dead
Bring your own disks to its object appliances
Nimble's latest mutants GORGE themselves on unlucky forerunners
Crossing Sandy Bridges without stopping for breath
A beheading in EMC's ViPR lair? Software's big cheese to advise CEO
Changes amid rivalry in the storage snake pit
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.