Nortel Networks seeks court approval of proposed sale to Genband

By Lisa Kerner

Charlotte, N.C., Dec. 23 - Nortel Networks Corp. and some of its subsidiaries entered into a stalking horse asset sale agreement with Genband, Inc. for the sale of substantially all of the assets of its North America, Caribbean and Latin America and Asia Carrier VoIP and Application Solutions business.

In addition, the company entered into an asset sale agreement with Genband for the sale of substantially all of the assets of the Europe, Middle East and Africa portion of its CVAS business.

The purchase price is $282 million, subject to balance sheet and other adjustments currently estimated at approximately $100 million, according to a Nortel news release.

Genband shareholder One Equity Partners III, LP will assist in the financing of Nortel's CVAS assets.

Nortel filed a motion asking the U.S. Bankruptcy Court for the District of Delaware to approve bid procedures for the sale.

A hearing on the bid procedures will be scheduled for Jan. 6.

An auction of qualified bids, if any, will tentatively occur on Feb. 24, according to the motion.

Incremental bids must be $3 million more than the starting bid or leading bid.

Nortel agreed to pay Genband a fee of $5 million it chooses another bidder.

Following completion of the bidding process, final approval of the U.S. and Canadian courts will be required, Nortel said in the release.

"The proposed transaction represents a clear and positive step forward for Nortel's CVAS customers, employees and business," said Samih Elhage, president of Nortel's CVAS business.

Nortel, a Brampton, Ont.-based manufacturer and supplier of telecommunications networking equipment, filed for bankruptcy on Jan. 14, 2009. Its Chapter 11 case number is 09-10138.

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