Is Nortel Fishing for New CDMA Bids?

By Mark Evans | Published: July 11, 2009

Wireless Week has an interesting story about a conference call held by Nortel on Thursday, purportedly about the “realities of the current CDMA market”.

However, Wireless Week’s Maisie Ramsay opined that the conference call “sounded suspiciously like a sales pitch for its CDMA assets”, which Nokia Siemens has bid for acquire for $650-million (along with Nortel’s LTE R&D unit).

In the story, ABI Research analyst Nadine Manjaro suggests the real purpose of the conference call was to attract higher bidders for the CDMA business before an auction is hold on July 24.

“The Nortel call today was to tout Nortel’s true value, which will potentially increase bidders,” she told Wireless Week. “All of the recent press has been more on the negative side so it was an effort to say that even though the company is going through bankruptcy, the assets are still valuable.”

From the outside looking in, it appears Nokia Siemens would get a sweet deal for the CDMA business, which had about $700-million in profits last year on sales of about $2-billion.

Even though sales and profits are expected to sharply decline as the CDMA business loses market share, it is interesting there have been no other bids or even expressions of interest.

However, Bruce Gustafson, Nortel’s VP of strategic marketing, suggested there were offers out there. “If you’re assuming there are no additional bids because there’s no public disclosure, you’d be mistaken,” he said.

Meanwhile, Matlin Patterson, an investment firm that buys distressed assets, is working on a buy-out offer for Nortel with speculation it will sell the enterprise business.


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  • less

    The tone was set April 25, 2002, a full seven years ago:

    “Where is the CEO?” “That is one obscene golden handshake” “You have no credibility”
    “Why do I have to get my disclosure from the media? My problem with all your documentation is that it’s heavy on rhetoric and short on numbers. You have to weed through masses of words to find the facts.”

  • less

    Many a customer has long had to put up with the current and solidly entrenched clique of Absolute Masters. They just can't come out and say it.

  • protosphere

    There is no more new management, they are trying hard and fast to sell off the tanker in pieces.

    Management has always been a major problem. These positions were termed “hard to fill” even after so many insiders only.

    Better heads prevailed with the dream team replaced by this green team missing in action during the telecom wars and none could do anything amid insurmountable woes that only progressed to the worse, then bankruptcy to total liquidation.

    Today they try to selling the tanking farm after fraud, revisions, so many contradictions amid exorbitant pay practices it has become synonymous with a really bad joke.

    Things only got more and more junior and keystone it seems. Fraud was their main downfall as orders ceased thereafter, revisions the icing on the cake. It was difficult to make sales to now difficult top sell tanking units.

    Perhaps innovation and selling was beyond their grasp which only left cost cuts and remuneration regardless of outcome as the incentive.

    They paid themselves almost as much as they got for their most profitable division to bring it to its knees and got almost half as much for UMTS, and paid more than half for PEC and Tasman. Jinxed gambles.

    Even if they didn't go bust, just how much of a worse management could come next given these positions are not attractive and hard to fill. Aside form everyone loving to be CEO for what they pay.

    There is no way now or money let alone credibility, it is over.

    Not much left as they subsidize the white elephant's take over who's assets decline by the day and left for others to gamble with when, again,. better heads prevailed and could do…. nothing =)

    =)

  • less

    Mike would have to go first. I couldn't trust anyone added under him to be competent, or able to effect change.

    Thems the realities.

  • yes4aapl

    They paid themselves almost as much as they got for their most profitable division to bring it to its knees and got almost half as much for UMTS, and paid more than half for PEC and Tasman. Jinxed gambles.
    =====
    re
    2 things
    nr 1
    How much they paid managers, CEO CFO?
    It used to around $1 mill a year Nowadays it's $10-$20 mill even under BK protection!
    nr 2
    How much Nortel paid for acquired companies?
    The ratio was 100x profits?
    It must be a scam on its own. We pay you more you share cash back with us… must be!
    PECS, who needs them?
    Sorry guys working for PECS, you would be better off without Midas=Nortel touch.

  • less

    Addendum to what I'd posted in this thread earlier:

    07/11/2009
    In a conference call this week, an ABI researcher called out Nortel for spending an hour rambling on about how monetizable its assets are.

    ABI’s Nadine Manjaro told company representatives everyone on the call appeared to be listening to nothing more than a sales pitch, rather than news and information about the company’s future. She claims the bankrupt giant is simply trying to fend off negative press and increase the number and value of bids coming in for its assets.

    Cisco shill, Cisco shill.

    http://www.billingworld.com/news/briefs/beads-o…

  • less

    Bidding for Nortel's CDMA and LTE assets begins July 24, and Nortel took the opportunity in a webcast last week to spell out all of the ways the company is providing leadership in the space, how valuable its assets are and how it is continuing to operate business as usual.

    The hour-long marketing pitch made ABI analyst Nadine Manjaro ask during the question-and-answer session whether the presentation's objective was to brief potential bidders in the value of Nortel's wireless assets.

    Bruce Gustafson, the vendor's wireless marketing vice president, in essence said, “no,” all the while reinforcing the fact that Nortel's business is “clearly a valuable asset and the market has realized that. NSN stepped up and there may be other bidders, but we have been quiet for a long time. Now that we know we will exist and that there is continuity for the business, it's time to remind people of the business.”

    Nortel will exist. Period.

    http://www.fiercebroadbandwireless.com/story/bi…

  • ntpurgatory

    Maybe the name will exist with a product line, but the company I think is like the 14-15 30 foot tall trees in front of the Richardson BNR/lab building….. dead gone kaput. The dead trees are a symbolic statement to drivers going by the building on the highway…

  • bulletproof

    French employees, still on strike, demonstrate at E&Y's building (Paris), and bury Nortel Networks SA
    Video:
    http://www.youtube.com/watch?v=VwAH15qyni4
    Still more actions to come from France: carriers are talking about penalties, E&Y may be sued, etc…
    May this example inspire all Nortelian over the world, to stand up and get the reward of all of these years spent building Nortel, instead of letting all that wealth going in the pockets of advisors, administrators, attorneys or whatever
    Stand up !

  • less

    lol – they've not been sent reclamation yet?

  • ntpurgatory

    No, that would cost money. Wait… Maybe the dead trees are stayed in CCAA / Chapter 11 proceedings? They have intrinsic value (firewood) and the bondholders are going to need all the assets they can liquidate to assure they get the maximum value back from their investments…

  • less

    Quitters. Pessimists.

    Plus, (“plü“) the coffin could inspire any number of disgruntled US employees to act out violently against the BoD, thereby disrupting its ongoing restructuring efforts, set to conclude within the next 12-18 months.

  • less

    lol – sure, paper can be made from wood pulp, and printed with anything.

  • NortelTragedy

    Dion Joannou hired to help with Nortel unit bid

    http://www.financialpost.com/story.html?id=1786781

  • tfig

    There has been plenty of discussion about wireless, enterprise and MEN but has anyone any thoughts/rumours/wild speculation about the CVAS part of Nortel (ne CVoIP)?

    Seems strange that a large chunk of the company has barely been mentioned on AAN and elsewhere.

    Could it be thank as it has a larger revenue than MEN and enterprise it is easier for the SLT to keep hold of it and carry on taking bonuses?

  • ChaiTea

    This is getting very interesting. Looks like these MP vultures are gonna put up a big fight.

    Too bad for the NA employees if they win. The cost cutting/layoff misery will continue forever…..

  • NTblinker

    you can't get the answer until july 24. wait wait. all we did and do till now.

  • scalppeeler

    A 44 year old frenchman with a silver spoon.
    MP is doomed.
    Reading the article insinuates MP is only interested in wireless although the suggestion is they would want more?

  • Soon2BExNortel

    LOL! If I remember, I'll check tomorrow.

    Right now the intranet site has a story about a GSM-R win with Czech Railways.

  • Wapuka1

    Of course Nortel's management would like to receive a higher bid for the CDMA and LTE assets. It appears that they have two subjective goals: (1) to dismember Nortel by selling all asstes as quickly as possible; and (2) to maximize the bonus pay out to the executive management team.

    The current management team and the BoD have been operating under the assumption that their obligations are only to a certain class of creditor and to themselves. They believe that they have no obligations to existing employees or to employees owed severance, and that their obligations to pensioners will be defined by the court under bankruptcy laws.

    As for bidding on Nortel's CDMA & LTE assets, there are very few potential for these assets, and only one or two that could top Nokia's bid. It will be very difficult for MP to raise sufficient capital to offer a bid for all of Nortel that would trump the Nokia bid bid for just the CDMA & LTE assets. MP's goal in any buy out would be to made whole on their $400M bond holdings plus to be able to pay back all capital and interest payments with 18 months, plus generate a substantial profit by dismembering most of Nortel via cash sales and then spinning off substantially smaller entity to some 3rd party.

    For the past 3 1/2 years I have been saying that Nortel was careening towards bankruptcy and them dismemberment and I was right. Now I am saying that it will be almost impossible for MP to raise sufficient capital to satisfy the claims of the other 90% of the bod holders, and submit a bid that would be acceptable to the courts versus the Nokia bid. It is also obvious that MP believes that it has no obligations to current employees, severed employeees, or pensioners. Current Nortel employees had better be aware of the salient fact that MP's only objetctive is to get the maximum return for its investment. This would mean that all employees would be facing the renegotiation of all labor contracts at substantially lower pay rates (probably by at least 25%) and with substantantially fewer benefit costs.

  • less

    I do occasionally wonder how that guitar is doing……

  • less

    I do occasionally wonder how that guitar is doing……

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