Nortel to sell important divisions: report

Nortel Networks is in talks to sell its two main businesses to rivals, a sign the Toronto-based telecom equipment company could break apart rather than emerge from bankruptcy restructuring as planned, according to the Wall Street Journal.

The Journal said Nortel has been able to attract interest in the sale of its core wireless-equipment business and a separate unit that builds telecom systems for offices.

These businesses posted $6.7 billion in sales last year.

"What we are finding is that there may be a lot more value by selling rather than emerging," said an unnamed source quoted by the paper. "The company was surprised by the amount of interest and the number of calls."

Nortel declined comment.

The Journal said several competitors have expressed interest in buying Nortel's enterprise unit, which makes communications networks for corporations.

Potential buyers included Avaya and Siemens Enterprise Communications, according to the people familiar with the matter.

Cisco Systems looked at the unit as well but is not expected to bid, the Journal sources said.

Nortel also is in talks to sell the unit that sells wireless voice gear to rivals, including Nokia Siemens Networks, which long has sought to expand in the U.S. 

The bankruptcy-law process requires Nortel to seek the most value for creditors, which include the holders of $4.5 billion US in debt, ex-employees owed severance and retired managers whose pensions were paid by the company's operating funds.

Nortel filed for bankruptcy protection from creditors in January in Canada and the United States and expects to outline its restructuring plan publicly in April or May.