Here’s a confidential document that Nortel created to address its key messages as well as Q&A for customers in the wake of the proposed sale of its CDMA business and LTE R&D unit to Nokia Siemens.
One of the more interesting tidbits is the name “Nortel” could be sold as part of a transaction.
Key Messages:
“After careful review – decision taken to find buyers for each of our businesses – best way to carry Nortel’s rich innovation platforms into the future.”
Best path for Nortel to maximize value while preserving innovation and jobs to the greatest extent possible; Provides clarity for our customers and employees and maximizes value for our creditors
“Taken decisive action to move forward with a plan to sell substantially all of our CDMA business and LTE Access assets.”
Entered into a Stalking Horse Sale Agreement for the sale of substantially all CDMA Business and LTE Access Assets with Nokia Siemens Networks for US$650 million; Demonstrates the strength and value of Nortel’s wirelss assets throughout the industry; Seeking a strong and stable buyer is the best path forward for our CDMA business and LTE Access assets.
If successfully completed, this transaction would:
- Give our customers a clear roadmap for the future evolution of their networks
- Preserve employement to the greatest extent possible
- At least 2,500 employees would have the opportunity to continue with Nokia Siemens Networks.
This represents the majority of the employees associated with the assets being sold.
“Process well under way – Company is advancing in its discussions with external parties to sell its other businesses.”
Focused on finding the right buyers for our businesses; Will assess other restructuring alternatives for these businesses in the event it is unable to maximize value through sales; Will apply to delist its common shares and the NNL preferred shares from trading on the Toronto Stock Exchange
No change in our near term focus: Customer contracts remain in place during this process and we will continue to communicate with you throughout this process
- Nothing changes until the stalking horse process is complete
- We will be speaking with customers 1:1 to help them understand the process, and the scope of the proposed sale
Important to understand that this transaction is not final and is subject to a bidding process. This agreement has no immediate impact on Nortel’s current customer contracts. We will remain focused on our customers throughout this process and continue to be responsive and maintain open communication.
Q&A
Is Nortel headed for a break-up?
After completing a careful analysis, it has become clear that the optimal path for each of our businesses is to find buyers who can carry Nortel’s rich innovation platforms into the future.
The company is advancing in its discussions with external parties to sell its other businesses – this will provide an opportunity to maximize value while preserving innovation and jobs to the greatest extent possible
Is Nortel emerging from bankruptcy?
Nortel is focused on finding the right buyers for its businesses. If we are successful in selling our businesses Nortel will not continue as a going concern and will not emerge.
Does this mean Nortel is being liquidated?
No. We are focused for finding the right buyers for all of our businesses. After completing a careful analysis of each of our businesses, it has become clear that the best outcome for each of our businesses is to find buyers who can carry Nortel’s rich innovation platforms into the future. The company will assess other restructuring alternatives for these businesses in the event it is unable to maximize value through a sale.
What will happen to the Nortel name?
If we are successful in selling all our businesses, the Nortel name may continue with one of those businesses, depending on the terms of the deal.
What happened – what got you to this point?
After completing a careful analysis, it has become clear that the optimal path for each of our businesses is to find buyers who can carry Nortel’s rich innovation platforms into the future. We believe this is the best path for our businesses and our customers
What is a “stalking horse”?
In the U.S., this sale requires a court-approved bidding process, known as a “stalking horse” or 363 Sale under Chapter 11 of the US Bankruptcy Code. In addition, consummation of the stalking horse transaction is subject to higher or otherwise better offers, approval of the United States Bankruptcy Court for the District of Delaware and the Ontario Superior Court of Justice, and the satisfaction of other customary and other conditions.
We expect the U.S. stalking horse process to continue for a period of 39 days once bidding procedures are approved. Thereafter additional time may be required to satisfy all other conditions and obtain other necessary court or government approvals. We will update you on the status of the process as further information is available.
WIRELESS:
Will Richard Lowe (or any other executive) have a position at NSN? What will that be?
We are at the start of a bidding process and we are unable to comment on these details until the 363 sale process is complete.
What is the benefit for NSN in purchasing Nortel’s LTE/CDMA assets?
If the sale is successfully concluded, it would provide NSN with technology, know-how, and embedded resources to support a significant new customer base in NA and abroad. NSN would also gain a team of the most capable employees in our industry. If the sale is successfully concluded, Nortel’s LTE innovation could enable NSN to enter 4G market trials in 2009. We have already made significant advancement in 4G, and have seen significant market success. Nortel is involved in LTE trials with operators around the world.
Earlier this year, Nortel showcased the power of LTE at Mobile World Congress in Barcelona, Spain in February. We worked with industry partners like LG Electronics to demonstrate LTE’s ability to offer high speed mobile broadband on live air networks and across various spectrums. We also supported T-Mobile’s LTE showcase in Bonn, Germany and displayed those mobile capabilities in Barcelona.
Why didn’t you consolidate three years ago when the rest of the industry was consolidating (Alcatel-Lucent, Nokia-Siemens, etc.)?
We reviewed numerous M&A scenarios over the past several years, but none of these made sense/were in the best interests of Nortel at the time.
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Confidential: Nortel’s Key Messages and Q&A for Customers
Here’s a confidential document that Nortel created to address its key messages as well as Q&A for customers in the wake of the proposed sale of its CDMA business and LTE R&D unit to Nokia Siemens.
One of the more interesting tidbits is the name “Nortel” could be sold as part of a transaction.
Key Messages:
“After careful review – decision taken to find buyers for each of our businesses – best way to carry Nortel’s rich innovation platforms into the future.”
Best path for Nortel to maximize value while preserving innovation and jobs to the greatest extent possible; Provides clarity for our customers and employees and maximizes value for our creditors
“Taken decisive action to move forward with a plan to sell substantially all of our CDMA business and LTE Access assets.”
Entered into a Stalking Horse Sale Agreement for the sale of substantially all CDMA Business and LTE Access Assets with Nokia Siemens Networks for US$650 million; Demonstrates the strength and value of Nortel’s wirelss assets throughout the industry; Seeking a strong and stable buyer is the best path forward for our CDMA business and LTE Access assets.
If successfully completed, this transaction would:
- Give our customers a clear roadmap for the future evolution of their networks
- Preserve employement to the greatest extent possible
- At least 2,500 employees would have the opportunity to continue with Nokia Siemens Networks.
This represents the majority of the employees associated with the assets being sold.
“Process well under way – Company is advancing in its discussions with external parties to sell its other businesses.”
Focused on finding the right buyers for our businesses; Will assess other restructuring alternatives for these businesses in the event it is unable to maximize value through sales; Will apply to delist its common shares and the NNL preferred shares from trading on the Toronto Stock Exchange
No change in our near term focus: Customer contracts remain in place during this process and we will continue to communicate with you throughout this process
- Nothing changes until the stalking horse process is complete
- We will be speaking with customers 1:1 to help them understand the process, and the scope of the proposed sale
Important to understand that this transaction is not final and is subject to a bidding process. This agreement has no immediate impact on Nortel’s current customer contracts. We will remain focused on our customers throughout this process and continue to be responsive and maintain open communication.
Q&A
Is Nortel headed for a break-up?
After completing a careful analysis, it has become clear that the optimal path for each of our businesses is to find buyers who can carry Nortel’s rich innovation platforms into the future.
The company is advancing in its discussions with external parties to sell its other businesses – this will provide an opportunity to maximize value while preserving innovation and jobs to the greatest extent possible
Is Nortel emerging from bankruptcy?
Nortel is focused on finding the right buyers for its businesses. If we are successful in selling our businesses Nortel will not continue as a going concern and will not emerge.
Does this mean Nortel is being liquidated?
No. We are focused for finding the right buyers for all of our businesses. After completing a careful analysis of each of our businesses, it has become clear that the best outcome for each of our businesses is to find buyers who can carry Nortel’s rich innovation platforms into the future. The company will assess other restructuring alternatives for these businesses in the event it is unable to maximize value through a sale.
What will happen to the Nortel name?
If we are successful in selling all our businesses, the Nortel name may continue with one of those businesses, depending on the terms of the deal.
What happened – what got you to this point?
After completing a careful analysis, it has become clear that the optimal path for each of our businesses is to find buyers who can carry Nortel’s rich innovation platforms into the future. We believe this is the best path for our businesses and our customers
What is a “stalking horse”?
In the U.S., this sale requires a court-approved bidding process, known as a “stalking horse” or 363 Sale under Chapter 11 of the US Bankruptcy Code. In addition, consummation of the stalking horse transaction is subject to higher or otherwise better offers, approval of the United States Bankruptcy Court for the District of Delaware and the Ontario Superior Court of Justice, and the satisfaction of other customary and other conditions.
We expect the U.S. stalking horse process to continue for a period of 39 days once bidding procedures are approved. Thereafter additional time may be required to satisfy all other conditions and obtain other necessary court or government approvals. We will update you on the status of the process as further information is available.
WIRELESS:
Will Richard Lowe (or any other executive) have a position at NSN? What will that be?
We are at the start of a bidding process and we are unable to comment on these details until the 363 sale process is complete.
What is the benefit for NSN in purchasing Nortel’s LTE/CDMA assets?
If the sale is successfully concluded, it would provide NSN with technology, know-how, and embedded resources to support a significant new customer base in NA and abroad. NSN would also gain a team of the most capable employees in our industry. If the sale is successfully concluded, Nortel’s LTE innovation could enable NSN to enter 4G market trials in 2009. We have already made significant advancement in 4G, and have seen significant market success. Nortel is involved in LTE trials with operators around the world.
Earlier this year, Nortel showcased the power of LTE at Mobile World Congress in Barcelona, Spain in February. We worked with industry partners like LG Electronics to demonstrate LTE’s ability to offer high speed mobile broadband on live air networks and across various spectrums. We also supported T-Mobile’s LTE showcase in Bonn, Germany and displayed those mobile capabilities in Barcelona.
Why didn’t you consolidate three years ago when the rest of the industry was consolidating (Alcatel-Lucent, Nokia-Siemens, etc.)?
We reviewed numerous M&A scenarios over the past several years, but none of these made sense/were in the best interests of Nortel at the time.
Technorati Tags: mike zafirovski, nokia-siemens, nortel