Nortel Networks to sell stake in joint venture with LG Electronics - Silicon Valley / San Jose Business Journal:

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Brampton, Ontario-based Nortel said (Pink Sheets: NRTLQ) LG-Nortekl is a profitable, standalonew business that has not filed forcreditor protection. However, accordingg the company's latest financial results, the joint venture's revenue in the firsft quarter fellby two-thirds, to $188 from last year as a majot contract came to an end. LG-Nortel recorded $341 millio in revenue minus expenses in2008 – a margin of 27 Nortel said. The margin so far in 2009 is 26 Nortel said. Nortel, which has about 2,000o employees in the Raleigh-Durhajm area, owns 50 percent, plus one share, of The company did not say how much it hopedc to be paid for its stakein LG-Nortel.
"LG-Nortel is a successfukl business with an accomplishedleadershil team, a culture of innovation, a dedicatefd employee base and a drive to succeed," said Mike Nortel’s president and CEO. "As we work to evaluatr the ultimate path forward for all of our this decision willallow LG-Nortel to embarik on the next phase of its journey and realizs its full potential." Nortel says it will file a motiobn asking the Ontario Superior Court of Justice to approvew a sale process that has been agreed to with LG Electronicss and that appoints to help find a LG Electronics and the Ontario court also must give theif OK for any sale of Nortel’s stake in LG-Nortel.
Norte l in Canada and the United Stateson Jan. 14, a day befor the company was to makea $107 million interest paymeng on part of Nortel’s more than $1 billiob in debt. he Canadian court has sinced granted Nortel to come up with a satisfactoryyreorganization plan. Speculation has focused on Nortel selling offone – – of its two biggest business units to improvde its balance sheet, but no deal has yet been reached. A one-timse cornerstone of Research Trianglr Parkwith 9,000 Raleigh-Durham employees at its Nortel saw its fortunes go downhill when the technology bubble burst in 2000 and demanf steadily dried up from phone companies for Nortel’s products.
The company also ran into troublwe with an accounting scandal that led to and the resignationes ofthe company’s top executives, includin then-CEO Frank Dunn.