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Nortel assets sale to Ericsson approved by Canadian, U.S. courts

Published: 28/07/2009 05:00

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Two courts in Canada and the United States on Tuesday approved the sale of key assets of Nortel Network, once Canada’s telecommunications giant, to Sweden’s LM Ericsson.

Ericsson CEO Carl-Henric Svanberg talks to reporters during a news conference in Stockholm June 25, 2009. (Xinhua/Reuters File Photo)

Ericsson won the bid with 1.13 billion U.S. dollars over the weekend to buy Nortel’s wireless technology division, as the insolvent company tries to sell itself off in chunks out of creditor protection.

The sale needed court approval because Nortel is operating in court-supervised bankruptcy protection in Canada and the U.S. The hearing Tuesday was a joint session involving a video link between courts in Toronto and Wilmington, Delaware.

Nortel’s falling to a foreign hand has raised strong opposition within Canada, with calls for the government to intervene on national security grounds.

Both Liberal Leader Michael Ignatieff and NDP Leader Jack Layton asked the federal government to block the sale as Nortel’s technology “represents some of the best intellectual innovative work done by Canadians over many decades,” and “is so valuable for the future of wireless technology around the world.”

Federal Industry Minister Tony Clement said Tuesday it is premature to say whether the government will intervene but promised to review the bid.

Nortel lawyers, however, maintained that the sale to Ericsson does not include the LTE patents, which will instead be licensed to the Sweden company. LTE is a key technology in future wireless services involving video streaming and faster data delivery speeds for consumers.

Founded in late 19th century, Nortel had developed into one of Canada’s largest companies over generations, accounting for more than a third of the total valuation of all the companies listed on the Toronto Stock Exchange by the 1990s. But the collapse of technology bubble around 2002 proved to be a disaster to the company, which was also bothered by financial scandals. In January 2009, the company filed for bankruptcy protection.

The sale of its key wireless assets mean the company could never successfully emerge from bankruptcy. It is also selling off its other business units.

VietNamNet/Xinhuanet

Provide by Vietnam Travel

Nortel assets sale to Ericsson approved by Canadian, U.S. courts - International - News |  vietnam travel company

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