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UPDATE 1-Nortel wireless auction to go ahead despite RIM

(Refiles to remove ‘corrected’ from headline)

* Nortel says asset auction still set for July 24

* Says all creditors must comply with bidding rules (In U.S. dollars unless noted)

TORONTO, July 22 (Reuters) - An auction of the wireless assets of bankrupt Nortel Networks NRTLQ.PK will go ahead as planned on Friday, despite objections from Research in Motion RIM.TO that it was blocked from submitting a $1.1 billion bid for the unit earlier this week.

“Nortel, the Canadian Monitor, the U.S. Unsecured Creditors’ Committee and the Ad Hoc Bondholder Group have reviewed the circumstances related to RIM and have concluded that all bidders must comply with the bidding rules in order to maintain the integrity of the court-approved process,” Nortel said in a statement late on Wednesday.

“Consistent with that process, the auction will commence as planned on Friday, July 24, 2009.”

Nortel said RIM, the maker of the ubiquitous BlackBerry smartphone, was blocked from the auction because it refused to comply with procedural requirements, including confidentiality clauses and a standstill provision requiring RIM to obtain Nortel’s consent to bid for any other of its assets if it is successful in the auction this week.

Preliminary offers to compete with a $650 million “stalking horse” bid from Nokia Siemens Networks [NSN.UL] for bankrupt Nortel’s CDMA and LTE wireless technology businesses were due on Tuesday, and the auction is set for Friday, July 24.

MatlinPatterson, a private equity firm that is also a major Nortel creditor, said soon after RIM announced its interest that it had submitted a $725 million offer for the wireless assets and that it would look at other Nortel units coming up for sale. (Reporting by Pav Jordan)

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