Nortel hits back at bankruptcy claims

Nortel has responded to international predictions of its impending demise, saying the company is in good shape and far from bankruptcy.

Nortel has responded to international predictions of its impending demise, saying the company is in good shape and far from bankruptcy.

UK-based TelecomTV reported last week that Nortel’s “tottering house of cards” was on the verge of collapse: its shares had just fallen 23% and the company was scrambling to reassure investors of its strength.

According to TelecomTV, Nortel’s difficulties directly flow on from a financial accounting scandal several years ago and a failure to move on from CDMA technologies.

In response to these and other allegations, Nortel issued a statement claiming the company is still in good shape.

“Nortel is a viable partner for the long term,” the statement read. “We have no debt maturity until 2011, and we are preserving and strengthening our cash position.”

The statement also referenced the company’s plan, first announced on November 10, to reduce costs by $400 million and shifting its operating model to reflect the current economy.

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