Avaya Seeks to Buy Nortel's Assets
Nortel Networks and Avaya have entered into a “stalking horse” asset and share sale agreement that has Avaya paying $475 million for Nortel’s global Enterprise Solutions business and shares of Nortel Government Solutions and DiamondWare units.
The agreement names Avaya as Nortel Enterprise Solutions’ preferred buyer, but the move must first be filed in U.S. Bankruptcy Court for the District of Delaware, along with a motion seeking the establishment of procedures for an auction that would allow other companies to top Avaya’s offer, as required under Section 363 of the U.S. Bankruptcy Code. Nortel, which is based in Toronto, will make a parallel filing in Canada with the Ontario Superior Court of Justice. The U.S. and Canadian courts will have the final say in approving the Avaya transaction or any others.
Nortel, which filed for bankruptcy in January, hopes to close the sale by the end of the year, according to company spokesman Ryan Hill.