Summary
The regional assets are usually second to go after the non-core assets as the companies consolidate to generate cash while undergoing the financial re-engineering.
Analysis
Nortel has been news for quite some time for all the wrong reasons. The company had been rolling out new products as well getting some contract wins but news about them is much less than about the company’s financial trouble. Like any option play, the company while on expansion spree put its money in growth technologies and businesses which may not be closely related to its core business and key technology areas. Off-course, while restructuring the company will try to generate the cash flow by selling such assets in other countries and the region (then in home country)and they have ready buyer in JV companies (like LG-Nortel) performing good (as other local and regional players might be interested). Also it is prudent to hive off non core technologies areas as separate stand-alone profit centre or divest them as company realign along selected core technologies. Local buyer into the JV will get the profitable business and quality human resource, of course by pulling in the more local (via their network) and regional business (they have good technology base aka Nortel) as well as rational cost (MNC Vs. regional/local) they can make business even more profitable also it will not be constraint by non-compete clause with Nortel’s other business units (note: I don’t have the information if this business has an exclusive mandate or act as regional business unit within the Nortel’s portfolio).
