Investors Look To Launch Rescue Bid for Nortel

NEW YORK (Reuters) – MatlinPatterson Global Advisors, a private equity firm specialising in distressed investments, is considering leading a rescue bid for the whole of Nortel Networks, The Financial Times reported on Sunday.

The New York-based company is trying to put together a consortium of investors to fund a recapitalisation of the Canadian company, the paper said, citing people familiar with the situation.

Any rescue bid would require a debt-for-equity swap and would need to be tabled by July 24, the date set by the bankruptcy courts to consider the $650 million “stalking horse” bid by Nokia Siemens Networks for most of Nortel’s core and profitable wireless equipment operations, the paper said.

Toronto-based Nortel, once the largest North American telecommunications equipment manufacturer, filed for bankruptcy protection in Canada and the United States in January, blaming the economic crisis for derailing a turnaround effort that began in 2005.

MatlinPatterson, a major bondholder and Nortel creditor, could not immediately be reached for comment. (Editing by Matthew Lewis)