CBC

Thu Apr 19, 4:55 pm

Things can only get better at Nortel: Roth

Nortel Networks has announced a huge first quarter loss and more job cuts. The telecommunications giant says that it has taken a loss of almost $2.6 billion in the first quarter of 2001 and that revenues fell over the three months as well. Nortel's sales dropped to $6.18 billion from $6.32 billion in the same period last year. Further, Nortel boss John Roth says the company is cutting another 5,000 jobs by the middle of this year. That's on top of the 15,000 job cuts previously announced. In all, the company will have laid off a quarter of workforce around the world. While Roth wouldn't speculate on Nortel's performance in the next quarter, he suggests that things will start looking up.

-- Rachel Gibson (rgibson@hotmail.com), April 19, 2001

Answers

Nortel is like Lucent except they have less exposure to vendor financing agreements. Here is an excerpt from bankruptcy.com

eGlobe, Inc. filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, listing total assets and liabilities of $99.48 million and $89.72 million, respectively. According to Court documents, some of the Company's top unsecured creditors include AT&T Corp., Sprint Corp., and Nortel Networks Corp

So it doesn't say how much these companies have loaned eglobe but they are unsecured creditors in any case which of course take back seat to secured creditors but are ahead of bondholders and at the end of the line would be shareholders of eGlobe.

Lucent has the most exposure for vendor financing. They loaned millions to Winstar that has just filed bankruptcy.

-- Guy Daley (guydaley@altavista.com), April 19, 2001.

Thanks for the additional info, Guy. What I find so confusing is that Nortel's shares have been rising slightly for the past couple of days!

-- Rachel Gibson (rgibson@hotmail.com), April 19, 2001.