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Nortel stable, says departing CEO

Nortel Networks' chief executive Mike Zafirovski, who yesterday announced he is to step down, says the company has stabilised since filing for creditor protection.

He was speaking after the beleaguered Candian telecoms equipment company reported better-than-expected second quarter financial results

Nortel filed for bankruptcy protection in Canada and the US in January and has since started selling off key parts of the business to cover debts.

Zafirovski said Nortel's results demonstrate solid financial performance over the first quarter and customer metrics remain strong, according to the Financial Times.

The second-quarter revenues of $1.97bn represent a drop of 25% compared with the same period a year ago, but an increase of 14% from the previous quarter.

Nortel also reported that it had increased its cash balances to $2.56bn at the end of June, compared with $2.48bn at the end of the previous quarter.

Zafirovski, who said there was no need to stay as the company shrinks with the sale of assets, is expected to leave Nortel within weeks.

The Nortel board said Zafirovski has fulfilled his commitment to see the company through its stabilisation and sale of its largest assets.

Earlier this month, Nortel won court approval for a $1.1bn deal with Ericsson.

The Swedish company outbid Nokia Siemens and MatlinPatterson in an auction for Nortel's core wireless assets, which was also held in New York.

Next month, US business communications group Avaya is expected to put in a $475m bid for Nortel's networking business.


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