Telecompaper

Nortel Networks has concluded a successful auction of substantially all of the assets of Nortel's global Enterprise Solutions business as well as the shares of Nortel Government Solutions and DiamondWare, Avaya has emerged as the winning bidder agreeing to pay USD 900 million in cash to Nortel, with an additional pool of USD 15 million reserved for an employee retention program. The sale is subject to court approvals in the U.S., Canada, France and Israel as well as regulatory approvals, other customary closing conditions and certain post-closing purchase price adjustments. While today's auction is a significant step in the overall sale process, it is not the final step. Nortel will work diligently with Avaya to close the sale later this year, subject to the timing of regulatory approvals. Nortel will seek Canadian and US court approvals of the proposed sale agreement at a joint hearing on 15 September. The sale close is expected late in the fourth quarter of this year. In some EMEA jurisdictions this transaction is subject to information and consultation with employee representatives. As previously announced Nortel does not expect that its common shareholders or the preferred shareholders of Nortel Networks will receive any value from the creditor protection proceedings and expects that the proceedings will result in the cancellation of these equity interests.