The pieces are all coming together.
Nortel is one smart cookie....
TORONTO -- Nokia Siemens Networks, the European telecommunications giant set to acquire Nortel Networks Corp.'s main division, said Thursday the company will not only maintain the current number of research jobs Nortel holds in Ottawa, but add to them, turning the capital into a "global centre" for next-generation wireless development.
The company also ruled out any interest at present in Nortel's remaining assets.
Luca Maestri, chief financial officer of Helsinki-based Nokia Siemens, told reporters in Toronto the company, a joint venture between Finnish handset-maker Nokia and Germany's Siemens AG, plans to maintain the 800 or so workers in the wireless unit and eventually add to the total.
"Not only do we want to protect those jobs, we want to grow them," he said.
Nokia Siemens bid US$650-million for the unit, Nortel's biggest, two weeks ago. As part of the financing, Export Development Canada has provided a $300-million line of credit, that Mr. Maestri, who sat in on the negotiations, said was not conditional upon guidelines for maintaining investment in this country. Yet the funds did come with an understanding that Nokia Siemens would preserve research in Ottawa, Nortel's historical R&D hub, notably in so-called Long-Term Evolution networks, the ultra-fast wireless network infrastructure currently being tested by some carriers.
"I made it very clear we want to make it the centre of excellence for LTE technology for us," Mr. Maestri said. "We really want to keep Ottawa as a centre of excellence -- it is going to be a global centre."
Nokia Siemens's acquisition of the unit, which also includes taking over Nortel's CDMA, or code division multiple access, a fading network technology but still widely in use, still faces obstacles.
Nokia Siemens is the lead bidder in what is termed a "stalking horse" auction process approved of by bankruptcy courts. The network giant's bid has set the floor for the asset's market value, but other suitors could emerge before a court-ordered deadline of July 21, at which point a formal auction would ensue. A final ruling on who will be awarded the division is slated for July 28, according to court documents.
Mr. Maestri said Thursday Nokia Siemens plans to close the deal in early August if the sale goes through.
The wireless unit's disposal is widely expected to be the first asset sale in a quick succession that will almost certainly see the 114-year-old former tech giant, which filed for creditor protection on Jan. 14, dismantled within months.
Toronto-based Nortel is currently in discussions to sell its other business lines, including the Enterprise unit, which makes network gear for large corporations and is the second-biggest revenue driver for the insolvent firm. The company's Metro Ethernet business is also on the block.
Nortel has given no indication on when it expects to sell the assets.
What is certain is that Nokia Siemens won't be a buyer, at least for now. Asked Thursday if the company was looking at Nortel's other remains, Mr. Maestri said: "Not at this point."