SAN FRANCISCO, USA: Networking equipment giant Nortel Networks Corp, which faced heavy loss in the third quarter, is seeking legal advice to explore the possibility of filing for bankruptcy protection should its planned restructuring fail, The Wall Street Journal reported on Wednesday.

Nortel, which was Canada's largest company till recently, has hired a legal counsel to explore bankruptcy protection, it said.

Nortel, however, still hopes that its restructuring plan will suffice to keep the company out of court, the newspaper said.

The company had reported a huge loss of $3.41 billion in the third quarter and its revenue fell to $2.32 billion.

However, a spokesman for Nortel said there was no imminent bankruptcy filing, WSJ said.

Meanwhile, National Bank Financial analyst Kris Thompson said Companies' Creditor Arrangement Act (CCAA) protection is premature at this point.

"With no short-term debt obligations and the possibility that Nortel can successfully restructure, we would not expect CCAA as a near-term consideration by the company," he said in a research note.

Nortel needs to take more time to sell one or more of its division before considering CCAA protection, he opined.