Canada's Nortel Networks, which filed forbankruptcy protectionin January, is to auction off
its enterprise networking business in New York today.
The business unit, which focuses on unified communications and
VoIP, is the latest division of Nortel to go on sale as the
beleaguered firm attempts to raise money to pay off its debts.
Last month, US business communications group, Avaya, indicated
it would be willing to pay up to $475m, but today's auction is now
expected to fetch more than $600m, according to the
Financial Times.
Siemens Enterprise Communications, a joint venture by Siemens
and US private equity firm, Gores Group, is expected to be Avaya's
main competitor as both seek to boost their position against market
leader, Cisco.
Analysts have speculated that other bidders may include
MatlinPatterson and Cisco.
Wireless deal
Last month, Nortel won court approval for a $1.1bn deal with
Ericsson, which outbid Nokia Siemens and MatlinPatterson for
Nortel's core wireless assets.
Because Ericsson is a Swedish firm, the deal is still being
reviewed to check it adheres to foreign ownership rules under the
Investment Canada Act before it is given the final go-ahead.
The sale of the rest of Nortel's core businesses is expected to
be completed by early next year.
Nortel posted second quarter revenues of only $1.97bn, a drop of
25% compared with the same period a year ago.
But the better than expected results were also a 14% increase
from the previous quarter, which
outgoing chief executive Mike Zafirovski said showed the
company had stabilised in recent months.
Photo: Rex Features