Minister of Industry Responds to Nortel Networks’ Restructuring Under Companies’ Creditors Arrangement ActOTTAWA, January 14, 2009 — On January 14, 2009, Nortel Networks announced that it is seeking an order to initiate a court-supervised restructuring under the Companies’ Creditors Arrangement Act (CCAA) from the Ontario Superior Court of Justice. The Honourable Tony Clement, Minister of Industry, made the following statement:
“Nortel Networks is known as a leader in the field of information and communications technologies and for its research and development in Canada. The decision to file for creditor protection was made by its Board of Directors in an effort to turn the company around. The Government of Canada appreciates the importance of the telecommunications industry to our economy and will continue to work with Nortel during its restructuring through Export Development Canada (EDC). EDC has agreed to provide up to $30 million in short-term financing through its existing bonding facility and is open to discussing with Nortel post-filing financing in conjunction with other financial institutions. It is important to note that Nortel is filing for court-supervised restructuring under the CCAA, not bankruptcy. Nortel has stated that it has every intention of emerging from this restructuring under the CCAA as a viable business. We will monitor its progress closely.”The CCAA allows for a court-administered process that gives corporations the opportunity to restructure their business so that they can continue to be a viable and sustainable entity contributing to Canada’s economy.
Background on Nortel’s restructuring-not-bankruptcy here. Also, is it just me, or is anyone else perpetually surprised to rediscover that Tony Clement is now at Industry, while Jim Prentice is – wait, where is he again? Oh, right: environment.