Nortel’s promise to detail reorganisation

Nortel plans to deliver more details about how it will get out of bankruptcy.

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Nortel plans to deliver more details, within a few weeks, about how it will get out of bankruptcy.

The company's bankruptcy protection has been extended from last Friday until 1 May, and sometime before then it will define its new structure and focus, Bruce Gustafson, Nortel's VP for strategic carrier marketing said in a Reuters report.

After its bankruptcy filing last month, Nortel had said it will get rid of an additional 30,000 jobs, but had not specified which ones. And it is backing away from selling its metro Ethernet division, something that has been a cornerstone of its overall plan to streamline the company since last year, possibly because it cannot find a buyer.

This type of uncertainty and the extended deadline has its suppliers worried that it will sit on components already delivered - neither using them nor returning them - until it determines its long-term plans. That prevents the suppliers from getting paid or selling the returned items to someone else.

JDS Uniphase and Andrew LLC, both suppliers of Nortel components, say in filings with the bankruptcy court that their interests are not being met, according to a published report on RedDeerAdvocate.com. The main complaint is lack of information from Nortel that is relevant to suppliers’ business decisions.

Nortel said in a statement: "Efforts are taking place across Nortel to establish a sound and fair operating cadence with suppliers."

Since its bankruptcy filing, Nortel has taken steps to cut expenses by selling off real estate and corporate jets. It has also ditched a deal to resell WiMAX technology, but is skipping to the next generation wireless technology, Long Term Evolution (LTE). The company is attending the Mobile World Congress show in Barcelona demonstrating the technology.

Nortel claims it has signed up new customers since its bankruptcy filing.

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