A View on View :: Nortel Sells Volt Delta Stake

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Nortel Sells Volt Delta Stake

by Mark Evans on Thu 29 Dec 2005 11:30 AM EST | Permanent Link

Only Nortel would come out with a double-shot of news during the week between Christmas and New Year. Earlier this week, it acquired Tasman Networks for $99.5-million in cash to establish a presence in the corporate router market. Today, it discloses the sale of a 24% stake in Volt Delta for $56.4-million. Nortel picked up the equity position in August, 2004 after "contributing" some assets and liabilities of its directory and operator service business to Volta Delta. Nortel CEO Mike Zafirovski has been at the helm for only six weeks but he certainly has wasted little time putting his mark on the company. It's been out with the old (Brian McFadden, Susan Spradley, Clent Richardson, Volt Delta) and in with the new (David Drinkwater, Joel Hackney, Tasman Networks). I wonder what we can expect from Nortel in 2006. The Tasman deal suggests it has no intention of getting out of the corporate market so perhaps the optical business is the most vulnerable. The next hurdle for Nortel is $1.275 billion of debt that comes due in February. Nortel CFO Peter Currie suggested the company could tap the junk bond market to re-finance it.

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Re: Nortel Sells Volt Delta Stake

by Jack_Bauers_Evil_Twin on Fri 30 Dec 2005 03:53 PM EST | Profile | Permanent Link

Mark,

Good entry, but (there it is) I have one small issue regarding the last sentence, "Nortel CFO Peter Currie suggested the company could tap the junk bond market to re-finance it."

I've been discussing Currie's comments on the NT board over on Yahoo! since yesterday evening, and I suspect, that since you read the Yahoo! board, this is where you might have become aware of his comments (I don't recall it seeing posted in contemporaneous news stories). If this is the case, then I'm not sure if you should attribute a "suggestion" to Currie without independently verifying the information and stating where and when Currie said it.

If you would like to verify Mr. Currie's comments at the Scotia Capital conference, then here is a direct link to the teleconference schedule of Nov. 14, 2005 (Currie's at 2:20PM):

BTW, I'm the guy who took you to task on the Yahoo! board a few weeks ago regarding your post Nortel's CEO Largesse.

After someone on that board noted you had seen my post and commented on it, I wrote that I would come here and post a "thank you" for your update, notation and explanation. I'm sorry that I forgot to do that, but as I said in that post, if I ever saw something in one of your entries I wanted to comment on, I would do it here first (as I have in this post).

In addition, I want to apologize for not posting my comments on the "Largesse" post on this blog before posting them on Yahoo!

Thank you for your attention and best regards!

Re: Re: Nortel Sells Volt Delta Stake

by Mark Evans on Fri 30 Dec 2005 05:56 PM EST | Profile | Permanent Link

jack,
peter currie's comments about the junk bonds came from a Q&A session at the scotia capital markets conference on nov. 14. here's the first four paragraphs of the story i wrote in the financial post on nov. 15:

Nortel Networks Corp. said it will likely refinance US$1.42-billion of debt coming due next year by issuing high-yield bonds.
At a Scotia Capital conference yesterday, Peter Currie, Nortel's chief financial officer, said although Nortel is exploring several options, he is not keen on issuing equity because the company's stock is trading at a low level.
"There is a less-than-clear view of the valuation Nortel has at the moment," he said. "It wouldn't do a whole lot of good to put a lot of equity out there."
Mr. Currie said there appears to be a lot of interest in high-yield bonds, which have become "surprisingly economic" compared with rates a few years ago.

hope that helps.

cheers, mark

Re: Re: Re: Nortel Sells Volt Delta Stake

by Jack_Bauers_Evil_Twin on Fri 30 Dec 2005 07:01 PM EST | Profile | Permanent Link

Mark,

Thanks for the clip from your Financial Post article, which clears up the sourcing nicely.

I don't know if you saw it on the Yahoo NT board, but I transcribed Currie's answer to that question and posted it on the Yahoo board. If you're interested, you can read it here

Regards,

Jack

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