Nortel Networkshas hired lawyers to
study possible bankruptcy protection in case its restructuring plan
fails, the Wall Street Journal
reported today.
The embattled network equipment maker, North America's biggest,
is also exploring potential help from the Canadian government, the
paper said.
A Nortel spokesman said the move will not affect the firm's
involvement with the
London 2012
Olympics or the
2010 Winter Olympics in Vancouver.
Nortel will
provide BT with routers, switches and networking equipment
required to build and support the London Games' network and
communications infrastructure.
She said Nortel was reshaping the business to better serve its
customers. She said credit rating agency Standard & Poor's
reported a fortnight ago that "Nortel should be able to sustain
adequate levels of liquidity in the next 12 to 18 months".
"We have no debt maturity until 2011, and we are preserving and
strengthening our cash position. On 10 November, we put in place an
aggressive plan to bring down costs by $400m with a minimum level
of cash outlay. The goals we laid out (then) have not changed. We
remain focused on executing a significant shift to our operating
model and cost base to reflect the economic environment that we are
now in. Our commitment is to remain an innovation-driven
organisation."
Nortel was one of the dotcom boom's high flyers. It has found it
hard to recover since then. In February it said it would lay off
2,200 staff, and last quarter
sacked another 1,300 after sales dropped 14% to $1.45bn.