Emergency Parliament Meeting on Nortel: Much Ado About Nothing

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Includes: BB, ERIC, NRTLQ
by: Mark Evans

So, the politicians got to hold an emergency meeting on Friday on Parliament Hill in Ottawa to review Nortel’s (OTC:NRTLQ) sale of its CDMA wireless business and LTE R&D unit to Ericsson (NASDAQ:ERIC) for $1.13-billion.

Here’s mini-synopsis:

  • After extensive negotiations, Research in Motion (RIMM) thought it had a deal to buy the LTE patents a few months ago before Nortel filed for bankruptcy protection. RIM co-CEO Mike Lazaridis describes the LTE patents as a “national treasure”. “We felt like we were snookered,” he said when Nortel announced a stalking horse deal with Nokia Siemens (NOK, SI) in mid-June to sell in the CDMA and LTE R&D units.
  • Lazaridis deflected a question about the difference between RIM’s approach to Nortel’s bankruptcy process (a willingness to lobby the federal government for intervention) vs. the approach taken by RIM’s other CEO, Jim Balsillie, in his pursuit of the Phoenix Coyotes (abiding by the bankruptcy rules)
  • Nortel chief strategy officer George Riedel makes it clear Nortel asked repeatedly for financial help before it filed for bankruptcy protection but the federal government refused.
  • Ericsson Canada CEO Mark Henderson promises the company will keep about 800 Nortel jobs in Canada.

Prediction: At the end of the day, the politicians can claim they made an attempt to do the right thing – but there’s no way the federal government is going to intervene because the assets in play are just not worth cashing in political collateral, particularly for a minority government.

For more, check out the Ottawa Citizen.