Tom Sweeney

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Nortel to Sell Ottawa Carling Campus to Public Works and Government Services Canada

Posted by sweens on October 19, 2010


October 19, 2010

TORONTO – Nortel Networks Corporation announced that as part of its focus on maximizing value for its stakeholders, its principal operating subsidiary Nortel Networks Limited and Nortel Networks Technology Corporation (together, Nortel) have entered into a sale agreement with Public Works and Government Services Canada (PWGSC) for the sale of Nortel’s Ottawa Carling Campus, for a cash purchase price of CDN$208 million. The sale, targeted to close at end of year, is subject to customary closing conditions as well as approval of certain governmental authorities and of the Ontario Superior Court of Justice.

The Ottawa Carling Campus is located on 370 acres of land in Ottawa’s National Capital Commission greenbelt, and is comprised of 11 interconnected buildings totaling over 2 million square feet.

The sale agreement provides for Nortel to continue to occupy parts of the Campus for varying periods of time to facilitate Nortel’s continuing work on its global restructuring including work under the transition services agreements with the various buyers of Nortel’s sold businesses. All other existing leases will be assumed by PWGSC, including leases with buyers of Nortel’s businesses. With respect to the lease with Ciena, the purchaser of the Optical Networking and Carrier Ethernet (MEN) business, Nortel is directed by PWGSC under the sale agreement to exercise, on closing, Nortel’s early termination rights under the lease, shortening the lease from 10 years to 5 years. This will result, pursuant to the lease with Ciena, in the repayment to Ciena of US$33.5 million from the escrowed sale proceeds from the MEN sale.

The sale agreement further provides that at closing title will be delivered free and clear of all encumbrances, including the charge in favour of Nortel Networks Inc. with respect to an intercompany loan agreement, under which US$75 million is outstanding as previously announced and reported.

As previously announced, Nortel does not expect that the Company’s common shareholders or the NNL preferred shareholders will receive any value from the creditor protection proceedings and expects that the proceedings will result in the cancellation of these equity interests.

http://www2.nortel.com/go/news_detail.jsp?cat_id=-8055&oid=100269828&locale=en-US&lcid=-1

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