Nortel Networks said today that it had filed for bankruptcy protection in the US and Canada in an effort by the once high-flying telecom giant to weather the financial crisis.
Nortel Networks employs over 300 in Galway, as well as 500 in a manufacturing facility in Belfast.
Once Canada's largest company, Nortel has been struggling since the dot-com collapse and a shifting of the telecommunications landscape. It is facing a repayment of some $107m in debts.
The company said in a statement it would seek creditor protection under the Companies' Creditors Arrangement Act in Canada and the US bankruptcy code's Chapter 11.
'The company's normal day-to-day operations are expected to continue without interruption,' Nortel said.
'Nortel remains 100% focused on serving customers worldwide through continued R&D (research and development) investments and support of its product portfolio to fulfill customer needs,' it said in a statement.
Nortel said the filings came as its reorganisation plan started in ran into problems.
'The global financial crisis and recession have compounded Nortel's financial challenges and directly impacted its ability to complete this transformation. Nortel is taking this action now, with a $2.4 billion cash position, to preserve its liquidity and fund operations during the restructuring process,' it said.
Nortel said it would make similar filings in European courts. It said affiliates in Asia, the Caribbean and Latin America, as well as the Nortel Government Solutions business, were not included in the proceedings.
The company lost $3.4 billion in the third quarter as revenues fell 14%.
