Nortel Networks, the Canadian telecom equipment maker, filed for bankruptcy protection from creditors on Wednesday, but analysts said its troubles might be too severe for it to recover and survive.
Unlike other companies, notably airlines, that have used bankruptcy protection to renew their businesses, Nortel, which began this decade as one of the world’s largest makers of telecommunications equipment, is probably headed for liquidation, several analysts said.
“I don’t think it’s going to exist,” said Mark Sue, an analyst with RBC Capital Markets, a unit of the Royal Bank of Canada.
PHOTO: BLOOMBERG
If Sue and others are correct, the end of Nortel would be one of largest failures in the telecommunications equipment business. During the 1990s, Nortel designed and built much of the fiber-optic equipment that now carries most of the Internet’s data.
Nortel’s woes went beyond finances. In the market for Internet-related equipment, particularly gear and software used by corporations, Cisco Systems and others proved to be more innovative and successful.
At the same time, Nortel faced increased competition in its traditional business of selling systems to telephone companies from both its traditional rivals and newcomers. Huawei Technologies (華為科技) of China has proven to be a particularly aggressive competitor, especially in emerging markets.
The bankruptcy filing was unanimously approved by Nortel’s board at a meeting in Toronto.
It appears to be an attempt to avoid US$107 million in interest payments that were due yesterday.
While the company has about US$2.4 billion in cash, that is rapidly depleting.
“Nortel must be put on a sound financial footing once and for all,” president and chief executive Mike Zafirovski said in a statement.
Without elaborating, Zafirovski, a former senior executive at Motorola, promised yet another revamp of Nortel.
Since the beginning of the decade, Nortel has started a series of overhauls that have included 16 rounds of layoffs.
STILL COMMITTED: The US opposes any forced change to the ‘status quo’ in the Strait, but also does not seek conflict, US Secretary of State Marco Rubio said US President Donald Trump’s administration released US$5.3 billion in previously frozen foreign aid, including US$870 million in security exemptions for programs in Taiwan, a list of exemptions reviewed by Reuters showed. Trump ordered a 90-day pause on foreign aid shortly after taking office on Jan. 20, halting funding for everything from programs that fight starvation and deadly diseases to providing shelters for millions of displaced people across the globe. US Secretary of State Marco Rubio, who has said that all foreign assistance must align with Trump’s “America First” priorities, issued waivers late last month on military aid to Israel and Egypt, the
France’s nuclear-powered aircraft carrier and accompanying warships were in the Philippines yesterday after holding combat drills with Philippine forces in the disputed South China Sea in a show of firepower that would likely antagonize China. The Charles de Gaulle on Friday docked at Subic Bay, a former US naval base northwest of Manila, for a break after more than two months of deployment in the Indo-Pacific region. The French carrier engaged with security allies for contingency readiness and to promote regional security, including with Philippine forces, navy ships and fighter jets. They held anti-submarine warfare drills and aerial combat training on Friday in
COMBAT READINESS: The military is reviewing weaponry, personnel resources, and mobilization and recovery forces to adjust defense strategies, the defense minister said The military has released a photograph of Minister of National Defense Wellington Koo (顧立雄) appearing to sit beside a US general during the annual Han Kuang military exercises on Friday last week in a historic first. In the photo, Koo, who was presiding over the drills with high-level officers, appears to be sitting next to US Marine Corps Major General Jay Bargeron, the director of strategic planning and policy of the US Indo-Pacific Command, although only Bargeron’s name tag is visible in the seat as “J5 Maj General.” It is the first time the military has released a photo of an active
CHANGE OF MIND: The Chinese crew at first showed a willingness to cooperate, but later regretted that when the ship arrived at the port and refused to enter Togolese Republic-registered Chinese freighter Hong Tai (宏泰號) and its crew have been detained on suspicion of deliberately damaging a submarine cable connecting Taiwan proper and Penghu County, the Coast Guard Administration said in a statement yesterday. The case would be subject to a “national security-level investigation” by the Tainan District Prosecutors’ Office, it added. The administration said that it had been monitoring the ship since 7:10pm on Saturday when it appeared to be loitering in waters about 6 nautical miles (11km) northwest of Tainan’s Chiang Chun Fishing Port, adding that the ship’s location was about 0.5 nautical miles north of the No.
RSS