Nortel Networks, the Canadian telecom equipment maker, filed for bankruptcy protection from creditors on Wednesday, but analysts said its troubles might be too severe for it to recover and survive.
Unlike other companies, notably airlines, that have used bankruptcy protection to renew their businesses, Nortel, which began this decade as one of the world’s largest makers of telecommunications equipment, is probably headed for liquidation, several analysts said.
“I don’t think it’s going to exist,” said Mark Sue, an analyst with RBC Capital Markets, a unit of the Royal Bank of Canada.
PHOTO: BLOOMBERG
If Sue and others are correct, the end of Nortel would be one of largest failures in the telecommunications equipment business. During the 1990s, Nortel designed and built much of the fiber-optic equipment that now carries most of the Internet’s data.
Nortel’s woes went beyond finances. In the market for Internet-related equipment, particularly gear and software used by corporations, Cisco Systems and others proved to be more innovative and successful.
At the same time, Nortel faced increased competition in its traditional business of selling systems to telephone companies from both its traditional rivals and newcomers. Huawei Technologies (華為科技) of China has proven to be a particularly aggressive competitor, especially in emerging markets.
The bankruptcy filing was unanimously approved by Nortel’s board at a meeting in Toronto.
It appears to be an attempt to avoid US$107 million in interest payments that were due yesterday.
While the company has about US$2.4 billion in cash, that is rapidly depleting.
“Nortel must be put on a sound financial footing once and for all,” president and chief executive Mike Zafirovski said in a statement.
Without elaborating, Zafirovski, a former senior executive at Motorola, promised yet another revamp of Nortel.
Since the beginning of the decade, Nortel has started a series of overhauls that have included 16 rounds of layoffs.
FOUR DESIGNATED AREAS: Notices were issued for live-fire exercises in waters south and northwest of Penghu, northeast of Keelung and west of Kaohsiung, they said The military is planning three major annual exercises across the army, navy and air force this month, with the navy’s “Hai Chiang” (海強, “Sea Strong”) drills running from today through Friday, the Ministry of National Defense said yesterday. The Hai Chiang exercise, which is to take place in waters surrounding Taiwan, would feature P-3C Orion maritime patrol aircraft and S-70C anti-submarine helicopters, the ministry said, adding that the drills aim to bolster the nation’s offshore defensive capabilities. China has intensified military and psychological pressure against Taiwan, repeatedly sending warplanes and vessels into areas near the nation’s air defense identification zone and across
FORCED LABOR: A US court listed three Taiwanese and nine firms based in Taiwan in its indictment, with eight of the companies registered at the same address Nine companies registered in Taiwan, as well as three Taiwanese, on Tuesday were named by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) as Specially Designated Nationals (SDNs) as a result of a US federal court indictment. The indictment unsealed at the federal court in Brooklyn, New York, said that Chen Zhi (陳志), a dual Cambodian-British national, is being indicted for fraud conspiracy, money laundering and overseeing Prince Holding Group’s forced-labor scam camps in Cambodia. At its peak, the company allegedly made US$30 million per day, court documents showed. The US government has seized Chen’s noncustodial wallet, which contains
SUPPLY CHAIN: Taiwan’s advantages in the drone industry include rapid production capacity that is independent of Chinese-made parts, the economic ministry said The Executive Yuan yesterday approved plans to invest NT$44.2 billion (US$1.44 billion) into domestic production of uncrewed aerial vehicles over the next six years, bringing Taiwan’s output value to more than NT$40 billion by 2030 and making the nation Asia’s democratic hub for the drone supply chain. The proposed budget has NT$33.8 billion in new allocations and NT$10.43 billion in existing funds, the Ministry of Economic Affairs said. Under the new development program, the public sector would purchase nearly 100,000 drones, of which 50,898 would be for civil and government use, while 48,750 would be for national defense, it said. The Ministry of
SENATE RECOMMENDATION: The National Defense Authorization Act encourages the US secretary of defense to invite Taiwan’s navy to participate in the exercises in Hawaii The US Senate on Thursday last week passed the National Defense Authorization Act (NDAA) for Fiscal Year 2026, which strongly encourages the US secretary of defense to invite Taiwan’s naval forces to participate in the Rim of the Pacific (RIMPAC) exercise, as well as allocating military aid of US$1 billion for Taiwan. The bill, which authorizes appropriations for the military activities of the US Department of Defense, military construction and other purposes, passed with 77 votes in support and 20 against. While the NDAA authorizes about US$925 billion of defense spending, the Central News Agency yesterday reported that an aide of US