Nortel Networks has agreed to sell assets from its optical
components business to Bookham Technology in the UK, for
approximately $108m (£69m).
The sale should help Nortel in its bid to regain profitability and
also ensure a continued supply of optical components with which to
build products for its customers, the company said in a statement.
The deal includes a three-year supply agreement under which Nortel
will buy components from Bookham worth at least $120m (£77m) over
the first 18 months.
The sale includes Nortel's transmitter and receiver business and
its pump laser and amplifiers busines. The assets to be sold
include patents, trademarks and other intellectual property.
Around 1,000 employees will have the option to stay on at Bookham
"after redundancies are addressed", Nortel said. The company could
not immediately be reached for clarification. Existing customer
contracts will be assumed by Bookham and designs and manufactures
optical components.
The deal is expected to close later this year pending certain
European and US regulatory approvals, as well as a vote by the
shareholders of Bookham.
Nortel made the sale in exchange for 61 million Bookham common
shares, nine million warrants with a strike price of one-third of a
penny and debt of $50m (£32m). Bookham Technology will also pay
Nortel a $10m (£6.4m) cash reimbursement for related restructuring
expenses.
Brian McFadden, president of Nortel's optical networks group said,
the transaction was an "important step" in Nortel's path to
profitability and its strategy to provide high performance,
cost-effective optical network systems for its customers.