Thursday, Nortel Networks Corporation (NRTLQ.PK) announced that two of its subsidiaries have entered into an agreement with Hitachi, Ltd. (HIT) for sale of certain assets related to its packet core network components for US$10 million.
Nortel's subsidiaries - Nortel Networks Limited and Nortel Networks Inc., have entered into an agreement with Hitachi for selling assets related to development of next generation packet core network components, excluding legacy packet core components for Nortel's GSM and UMTS businesses.
The assets under sale include software to support the transfer of data over existing wireless networks and wireless communications technology, including relevant non-patent intellectual property or IP, equipment and other related tangible assets, as well as a non-exclusive license of certain relevant patents and other IP.
The transaction is subject to approval by the U.S. Bankruptcy District Court of Delaware and the Ontario Superior Court of Justice and regulatory conditions. The sale is expected to close in 2009.
Nortel does not expect the company's common shareholders or NNL's preferred shareholders would receive any value from the creditor protection proceedings. It expects that the proceedings will result in the cancellation of these equity interests.
Nortel is currently trading at $0.0605, down $0.0024, in pink sheets, while Hitachi is currently trading at $32.63, up $0.99, on the NYSE.
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