NORTEL NETWORKS said yesterday its chief executive will step down immediately and its board will shrink from nine directors to three as the bankrupt telecom equipment maker works to sell off all of its major assets.
Nortel expects bids setting minimum prices for all of its divisions by the end of September, moving it closer to completing its own dismantling, Nortel chief executive Mike Zafirovski said.
Nortel, once North America’s biggest phone equipment maker, said its quarterly loss ballooned from a year earlier due to reorganisation costs and plunging sales, which it blamed on the weak economy.
Mr Zafirovski’s departure seemed inevitable after the once high-flying technology company, which at one stage employed more that 3,000 people in Ireland, filed for court protection from creditors at the start of the year.
The Toronto-based firm currently employs about 500 in the North and 300 in Galway.
The three remaining directors are John MacNaughton, Jalynn Bennett and David Richardson, who will serve as chairman.
A group of executives including chief restructuring officer Pavi Binning and chief strategy officer George Riedel will remain to manage the company.
No replacement was announced for Mr Zafirovski. The company said it would seek court approval for its monitor, Ernst Young, to take a bigger role in overseeing its business. It will also ask for US court approval to appoint a “principal officer”.
Nortel filed for protection from creditors in January, blaming the recession for derailing its turnaround. It has since started selling its major business lines, including a $1.13 billion (€799 million) deal to sell wireless assets to Sweden’s Ericsson.
Nortel’s loss widened to $274 million in the second quarter from a loss of $113 million in the same quarter last year. The loss included reorganisation costs of $130 million. – (Reuters)
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