Bankruptcy quake not to shake India says Nortel

Bankruptcy quake not to shake India, says Nortel

The company ensures that its affiliates cross Asia, including India, are not included in these proceedings and are expected to continue to operate as normal

CMN Correspondent

Thursday, January 15, 2009

BANGALORE, INDIA: When America shakes, the aftershock becomes visible in India, virtually.

The bankruptcy petition filed by American telecom major Nortel cannot be an exception.

Once the news of the company sought bankruptcy protection in Ontario Superior Court for its US unit, the impact was visible on the share value of the IT majors in the country.

So it is worth probing the impact of this financial crisis on the company's units in other countries, especially in India.

Despite the odds, Nortel vouches that the operations in India won't be affected, though it was not ready to disclose its financial position of the company in the country.

“Our affiliates across Asia, including India, are not included in these proceedings and are expected to continue to operate as normal,” said Matthew Wray, spokesperson, Nortel Asia.

“We remain fully committed to supporting R&D investments globally, and in continuing to fulfill our customers’ needs – in India and around the world.”

Explaining that the petition is based on chapter 11 of bankruptcy protection in the United States, so that the company gets time to reorganize, Wray said that it cannot predict on the outcome of financial and business restructure process at this stage for any specific country, including India.

Nortel has a wide client base in India with customers across many industry sectors – IT, financial services, transportation, health care, hospitality, education.

It has also made deals with Bharti Airtel, Mumbai International Airport and Chhattisgarh State Government.

Though one could be apprehensive about the future of these projects, Nortel assures that the customers won't get affected and the restructuring of business will allow it to emerge stronger.

“The Company has concluded that the fastest and most effective way to effect a transformation is to undertake a restructuring process under creditor protection.

We believe that the restructuring of our business will allow Nortel to emerge as a more focused, financially sound and competitive company.” said Wray.

The company has numerous projects in India and outsources to vendors which include TCS, Infosys, Sasken and Wipro amongst others.

Brushing aside the apprehensions, Nortel also says that the question of workforce reduction does not arise at this juncture.

“Nortel is filing with approx US$2.4B in unaudited cash balance at the end of 2008, so that it can manage with the expenditure such as investments in new projects, R&D, salary to the employees etc during its restructuring process,” explains Wray.

©CyberMedia News

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parm said on 1/21/2009 8:45:48 AM:
Shame to see a a well respected Canadian company like Nortel run so poorly by a Canadian! Im sure someone from India or China can turn it around!

to parm