Nortel Networks Corp. on Friday said it was in talks with banks to raise financing and had scrapped a $1.175 billion credit facility as part of amendments to security agreements the company reached with lenders.
The security agreements pledge Nortel’s assets to banks and debt securities holders as collateral for additional obligations, the company said.
Nortel said it was in talks with banks and Export Development Canada, a federal finance and risk management services corporation, to arrange support for obligations such as letters of credit, letters of guarantee and performance bonds.
The company also noted it has no intent to draw on its $750 million credit facility maturing in April 2005 and, as the company previously announced, would let its $1.5 billion credit facility expire today.
Doug Beatty, chief financial officer of Nortel, said in a statement the company expects to have more than $3 billion in cash at the end of the year.
“In 2003 in conjunction with our plan to drive the business to profitability by the second quarter of 2003, we continue to expect to fund restructuring costs of approximately $900 million and make the scheduled repayment on our public debt coming due September 1, 2003,” he added.
