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CORRECTED - UPDATE 1-Siemens SEN says eyeing parts of Nortel
May 14, 2009 / 10:26 AM / 8 years ago

CORRECTED - UPDATE 1-Siemens SEN says eyeing parts of Nortel

(Corrects spelling of Nortel CEO’s surname to Zafirovski in paragraph 6)

* Says interested in some of Nortel assets

* Aiming for presence in the U.S. market

* Sees sales decline 12-15 percent in fiscal year

* Says SEN is debt free

(Adds O‘Neill comments, detail)

By Jens Hack

MUNICH, May 13 (Reuters) - Siemens Enterprise Communications (SEN), a joint venture between Siemens and U.S. financial investor Gores Group, is looking into buying parts of bankrupt Nortel Networks Corp, the head of SEN said.

“The enterprise client unit is interesting. We are looking into that,” SEN’s chief executive James O‘Neill told Reuters on Wednesday, adding that the unit’s business with the U.S. government was particularly appealing.

SEN, which is present in Europe and Asia, is trying to gain a foothold in U.S. markets even if the Nortel deal does not work out, O‘Neill added.

Nortel’s enterprise unit is estimated to have a volume of about $2 billion.

Nortel, once the largest North American maker of telecommunications gear, filed for Chapter 11 bankruptcy protection in a U.S. federal court and for creditor protection in Canada’s Ontario Superior Court of Justice in January.

Nortel Chief Executive Mike Zafirovski confirmed on Monday that the company has held talks with suitors regarding possible asset sales, but declined to go into detail.

Nortel reported a 37 percent slide in its first-quarter revenue this week, blaming the weak economy and its bankruptcy filing, which rattled the confidence of some customers.

SEN, which specialises in communications systems for large corporations, had revenues of around 3.2 billion euros ($3.14 billion) in its fiscal year ending September 2008.

It will feel the impact of the global economic slowdown this year and expects to see sales shrink by 12-15 percent and to not be profitable this current fiscal year as previously planned.

But O‘Neill said SEN aims to achieve that goal in 2009/2010 by cutting costs. The company was also in negotiations with unions to agree on short-time work.

O‘Neill said altogether a fundamental restructuring of the business had been concluded and SEN had good potential for growth in the mid- and long-term.

“The future looks good,” O‘Neill said, adding there were signs that the worst was over for the sector.

He also said both Siemens and Gores had no plans to exit the joint venture.

The company was free of debt and the Gores group was in a good financial state, he said. ($1=.7327 Euro) (Editing by Jon Loades-Carter)

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