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Nortel Files for Chapter 11 Bankruptcy

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When I was but a wee lad at university Cisco and Nortel were seemingly unstoppable powerhouses with annual turnovers akin the national GDP of small countries. How times change...

Using the king of all marketing speak Nortel has this week announced it will commence "comprehensive business and financial restructuring" which it later admits to be Chapter 11 voluntary bankruptcy. It follows the suspension of its stocks on the New York Stock Exchange after they fell 97 per cent in the last year and comes just one day before the company was due to pay a $107m interest payment to creditors.

"Nortel must be put on a sound financial footing once and for all," said Nortel President and CEO Mike Zafirovski. "These actions are imperative so that Nortel can build on its core strengths and become the highly focused and financially sound leader in the communications industry that its people, technology and customer relationships show it ought to be. I am confident that the actions we're announcing today will be the fastest, most effective means to translate our improved operational efficiency, double-digit productivity, focused R&D and technology leadership into long-term success."

With the economy in its current state however this all sounds rather overly optimistic. In fact, if Nortel does have any chance of survival it's likely to be in a greatly slimmed down form. Either that or someone will come along and buy the brand name once the roof has caved in. And to think it was once valued at $250 billion in 2000.

Oh student memories how distant you now seem...

Link:
Press Release

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