Menu
RIM shut out of Nortel asset auction

RIM shut out of Nortel asset auction

Research in Motion is calling on the federal government to review the auction of Nortel Network's assets claiming it was shut out of bidding for the troubled network hardware maker's wireless properties.

Jim Balsillie, co-CEO of the BlackBerry maker, said his company was prepared to put down as much as US$1.1 billion for Nortel's code division multiple access (CDMA) and Long Term Evolution (LTE) businesses but restrictive conditions levelled on RIM's bid is preventing the company from keeping the keeping Nortel's assets in Canadian hands. RIM believes that such an offer would result in an "extremely attractive price" for Nortel creditors and value substantially in excess of the stalking horse bid made by Nokia Siemens Networks, a RIM statement issued late Monday night said.

Despite its efforts, "RIM has found itself blocked at every turn," Balsillie said.

The statement said, RIM sought to be considered as a qualified bidder in the auction for Nortel's wireless business but was told it would only qualify if it pledged not to submit offers for other Nortel assets for a year.

"In seeking to impose this condition, Nortel and its advisers were fully aware if RIM's desire to purchase other Nortel assets as part of a solution to retain key portions of Nortel's business under Canadian ownership" the statement said.

"Despite repeated efforts, Nortel, its advisers and its court-appointed monitor have rejected RIM's repeated attempts in meaningful discussions."

The statement also pointed out that the Nokia Siemens bid is propped up by a multi-million dollar loan from the government.

"RIM is extremely disappointed that Nortel's world leading technology, the development of which has been funded in part by Canadian taxpayers, seems destined to leave Canada and that Canada's own Export Development Corporation is preparing to help by lending $300 million to another bidder," the statement quoted Balisillie as saying.

The loss of Canadian ownership of Nortel's CDMA and Long Term Evolution Access businesses "may significantly, adversely affect national interests, with potential national security implications, and that the Government of Canada should review the situation closely," the statement said.

On Monday, Nortel announced that it has entered a "stalking horse" agreement in which Avaya Inc. of Basking Ridge, N.J. will buy its enterprise units for US475 million.

The move comes about a month after Nokia Siemens Networks entered into a similar agreement to buy Nortel's carrier wireless assets for US$650 million.

A group led by former Nortel president Robert Ferchat is hoping to raise $1 billion to keep the company in Canadian hands and is asking the government to delay the sale of its assets.

New York-based private equity firm MatlinPatterson Global Advisors is also backing a group led for former Nortel presidet Dion Joannou's bid for Nortel.

In January, this year Nortel applied for court approval for creditor protection in the Canada, the U.S. and Europe, following years of financial troubles.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Featured

Slideshows

Meet the leading female front runners of the Kiwi channel

Meet the leading female front runners of the Kiwi channel

Reseller News honoured the leading female front runners of the New Zealand channel at the 2018 Women in ICT Awards (WIICTA) in Auckland. The awards honoured standout individuals across seven categories, spanning Entrepreneur; Innovation; Rising Star; Shining Star; Community; Technical and Achievement.

Meet the leading female front runners of the Kiwi channel
Meet the top performing customer-centric Microsoft channel partners

Meet the top performing customer-centric Microsoft channel partners

Microsoft honoured leading partners across the channel following a year of customer innovation and market growth in New Zealand. The 2018 Microsoft Partner Awards recognised excellence within the context of the end-user, spanning a host of emerging and established providers.

Meet the top performing customer-centric Microsoft channel partners
Reseller News launches new-look Awards at 2018 Judges’ Lunch

Reseller News launches new-look Awards at 2018 Judges’ Lunch

Introducing the Reseller News Innovation Awards, launched to the channel at the 2018 Judges’ Lunch in Auckland. With more than 70 judges now part of the voting panel, the new-look awards will reflect the changing dynamics of the channel, recognising excellence across customer value and innovation - spanning start-ups, partners, distributors and vendors.

Reseller News launches new-look Awards at 2018 Judges’ Lunch
Show Comments