NEWS
Nortel, having filed in the US for bankruptcy protection this week, has decided to put its UK operation under administration. Its position as official network infrastructure provider for the London 2012 Olympic Games is not currently affected, however.
Nortel will remain a Tier 1 sponsor of the London 2012 Olympic Games, according to a statement on Thursday from Mario DiMascio, Nortel's VP of enterprise business in the northern region.
"Our commitment to the Games as a Tier 1 local sponsor and official Network Infrastructure Provider remains unchanged, as does our commitment to all our customers," DiMascio said in the statement.
Administrators Ernst & Young announced the move on Thursday, describing it as part of Nortel's wider "restructuring process". Nortel filed for Chapter 11 bankruptcy protection on Wednesday.
The statement read: "On a global basis, adverse economic conditions have made the current capital structure of Nortel Networks Inc unsustainable and it is imperative that the group addresses its financial position and the legacy costs burdening its balance sheet, to overcome current challenges and reposition itself for the future.
"The group concluded that the best way to effect this transformation was to undertake a restructuring process."
According to Ernst & Young, the administration order was issued "in the best long-term interests of Nortel and its stakeholders".
"The process of administration is expected to have no immediate impact on the company's day-to-day operations including employee pay and benefits, or on customer obligations," the statement read.
A spokesperson for Ernst & Young told silicon.com sister site ZDNet UK on Thursday afternoon that Nortel UK employed 2,004 staff members but no immediate decision has been made as to their future.
