Nortel set for LG Nortel stake sale

BANGALORE, INDIA: Cash strapped and beleaguered Canadian telecom company, Nortel Networks, is on path to divest its controlling stake in a South Korean joint venture with LG - LG Nortel, the telecommunications

equipment maker in which LG Electronics is the other partner. The move comes as a desperate bid to raise cash.

An FT report pointed out that Nortel is believed to have hired Goldman Sachs to find a buyer for its 50 per cent stake plus one share in LG-Nortel.

Though no official word has come out on this move, industry observers say that the sale could value the joint venture at close to $1bn. Nortel too, in the meantime, has not commented.

The company has said that it will continue to work closely with its joint venture partner LGE to ensure the future success of LG-Nortel. LG-Nortel has enjoyed significant growth since its formation and is a market leader in Korea and select international markets, it said, adding that LG-Nortel has no debt and boasts of a strong cash balance.

It is a known fact that Nortel had filed for bankruptcy court protection in mid-January after the credit crunch almost led to a collapse in customer orders. The company had been fast readying a restructuring plan aimed at enabling itself emerge from bankruptcy protection either intact, or having sold some of its assets.

Meanwhile, even as the news of stake sale came in, industry sources said that the sale would interest foreign private equity groups and overseas strategic players who are keen to enter one of the world's most advanced

technology-savvy markets.