Reports: Nortel To Sell LG Stake to Ericsson

Nortel Networks Corp. reportedly is ready to sell its stake in the venture with LG Electronics Inc. (LGERF.PK) to Ericsson (ERIC).

The LG venture is not part of bankrupt Nortel’s creditor protection proceedings, Nortel said last year. But selling its 50-percent-plus-one-share stake will help raise money to pay back creditors. The joint venture’s sales dropped 24 percent in the fourth quarter of 2009 to $154 million.

An Ericsson-LG deal is not necessarily sealed, however. LG told Bloomberg on Thursday that nothing has been decided, and Ericsson had yet to comment as well.

Since filing for bankruptcy in January 2009, Nortel has spent the intervening months auctioning its various assets to companies including Ericsson, Ciena Corp. (CIEN) and Avaya Inc.

LG Electronics and Nortel combined forces in November 2005 to develop and sell WiMAX products. LG and certain courts in Canada must approve any proposed sale. Goldman Sachs will help with the divestiture process.

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