Nortel Networks, which filed for bankruptcy protection in January, lost more than half a billion dollars and saw sales plummet 37% in the first quarter, but Chief Executive Mike Zafirovski said the company's cash balance gives it time to hold out for the best sale prices for its assets.
Nortel, which originally said it hoped to emerge from bankruptcy proceedings smaller and more focused, has been in discussions to sell its largest divisions, but the bids have been too low.
For example, Nortel declined an unsolicited, $850 million offer from Nokia Siemens Networks for large parts of its carrier-networks group. Nokia Siemens Networks is a joint venture of Nokia and Siemens that is seeking to court US carriers.
Last week Nortel was preparing to announce that it had found a buyer for its enterprise unit, which makes systems to route voice and data traffic within companies. The bidder, Avaya, is backed by the private-equity firms TPG Capital and Silver Lake. Advisers were working through the weekend of May 2-3 to complete the deal, but couldn't. Talks are continuing.
Nortel's first-quarter net loss came to $507 million, or $1.02 a share, compared with a year-earlier loss of $138 million, or 28 cents a share. Revenue fell to $1.73 billion. Nortel had $2.48 billion in cash at the end of March, up slightly from $2.4 billion at the end of 2008.
Zafirovski said that Nortel hadn't lost "a single customer" since its bankruptcy filing but acknowledged that customers had stopped buying new technologies when it entered the process. He said orders increased in February and March, signaling that the business had stabilized. (info from The Wall Street Journal)