Nortel Re-Organises Debts

Canadian press report that Nortel Networks plans to issue a US$2 billion offering of senior unsecured notes as it re-organises its debt holdings.

Nortel says it plans to use US$1.3 billion of the net proceeds to repay the US$1.3 billion one-year credit facility it entered into in February 2006. The remainder will be allocated to general corporate purposes, including replenishing recent cash outflows of US$150 million for the repayment of maturing notes, and US$575 million deposited into escrow on June 1 pursuant to the proposed settlement of shareholder class action lawsuits.

Nortel also says it has filed new audited consolidated financial statements as of December 31, 2005 and 2004 and for each of the years in the three-year period ended December 31, 2005. The changes reflect Nortel’s recent re-statement of revenues and earnings.

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