Nortel Networks 8-K 2010
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 20, 2010
NORTEL NETWORKS CORPORATION
(Exact name of registrant as specified in its charter)
Registrants telephone number, including area code 905-863-7000
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
On April 20, 2010, Nortel Networks Corporation (NNC) announced that its principal operating subsidiary, Nortel Networks Limited (NNL), entered into a share purchase agreement (Agreement) dated April 21, 2010 with Telefonaktiebolaget LM Ericsson (Publ) (Ericsson). The Agreement provides for the sale of NNLs 50% plus 1 share interest, including preferred shares, in LG-Nortel Co. Ltd. (the Joint Venture Company), the companys Korean joint venture with LG Electronics Inc. (LGE), for a purchase price of US$242 million in cash subject to certain purchase price adjustments.
The Agreement contains limited standard representations and warranties on the part of NNL and Ericsson. The Agreement is subject to approval of the Ontario Superior Court of Justice as well as satisfaction of customary regulatory and other conditions, including consents of certain customers, and the waiver of certain rights by LGE with respect to the sale of NNLs shares in the Joint Venture Company. In addition, it is a condition to closing that the closing conditions under the new joint venture agreement to be entered into between Ericsson and LGE be satisfied or waived. To the extent there is net cash (after deducting any outstanding bank indebtedness) in the Joint Venture Company at closing, NNL will receive, as part of the purchase price adjustment, approximately 50% of such net cash.
The share purchase transaction is expected to close in the summer of 2010.
As previously announced, NNC does not expect that its common shareholders or the preferred shareholders of NNL will receive any value from the creditor protection proceedings and expects that the proceedings will result in the cancellation of these equity interests.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: April 26, 2010