* Verizon ready to oppose sale, according to court filing
* Cites security, safety reasons
* Avaya says in talks with Verizon to reach resolution
(In U.S. dollars)
By Wojtek Dabrowski
TORONTO, Sept 10 Verizon Communications (VZ.N)
says it is ready to oppose the sale of the enterprise business
unit of Canadian telecom-equipment maker Nortel Networks'
NRTLQ.PK to Avaya Inc [AVXX.UL] for $475 million, citing
public safety and security concerns.
Verizon, a U.S. telecom company, buys and resells a range
of Nortel networking technology. As well as numerous private
companies, the customer base for these products includes U.S.
government arms as diverse as the military, anti-terrorism
agencies, the Congress and the court system.
In a court filing made earlier this week, Verizon said that
if Avaya, a U.S. telecom-equipment maker, buys Nortel's
enterprise business and Verizon's existing contracts are not
taken up and serviced by Avaya, Verizon plans to oppose the
That's because without ongoing maintenance, service and
support, Verizon clients that use Nortel's technology could
have their communications capabilities disrupted. That poses a
significant hazard to the public's welfare, security and
safety, Verizon said in a U.S. bankruptcy court filing.
Avaya's bid for the Nortel unit is a "stalking horse"
offer, which means it sets the floor for any other bids that
might come in. Last week, Nortel confirmed additional bids have
come forward ahead of the auction, which is scheduled for
Verizon acknowledges in its filing that it's possible a
deal between Verizon and Avaya will be reached. As well, it
says it's possible that Avaya will not be the ultimate buyer of
In a statement on Thursday, Avaya said it is talks with
Verizon to reach a resolution.
Nortel, once North America's biggest maker of telephone
gear, filed for bankruptcy protection in January, blaming the
economic crisis on derailing its turnaround efforts.
Not much later, it decided it could generate more value for
its creditors by selling itself off in pieces rather than
trying to restructure itself into a viable business.
(Reporting by Wojtek Dabrowski; editing by Peter Galloway)