MatlinPatterson Global Advisors, the New York-based private equity firm, has begun approaching potential strategic partners in preparation for a rescue bid for Nortel, reports the Financial Times (FT). The firm emerged as one of Nortel’s biggest creditors after the Canadian company filed for bankruptcy protection earlier in the year, and is set to go to head-to-head with Nokia Siemens Networks (NSN) in a court-supervised auction of Nortel’s assets next week. NSN has offered US$650 million for Nortel’s core mobile operations, but MatlinPatterson believes stakeholders could realise more value by avoiding breaking up the company. According to sources close to the company, MatlinPatterson has approached potential strategic partners in addition to reaching out to bondholders and other potential investors. “We welcome the opportunity to work with potential strategic partners to leverage Nortel’s resources and leading LTE technology long into the future,” MatlinPatterson said in a statement on Wednesday.
According to the FT, MatlinPatterson has assembled a team of telecoms industry veterans led by Dion Joannou, former president of Nortel’s North America operations, to advise on the rescue plan. Other advisors are thought to include Richard Burns, the former president of AT&T’s mobile network; Richard Piasentin, a former group vice-president of sales for Nortel; Tony Pirih, former head of Nortel’s R&D operations; and Chris Smith, former executive vice-president in charge of Alltel’s network operations. MatlinPatterson had earlier failed to to persuade the bankruptcy court judge to provide an extension to the 21 July deadline for rival bids, leaving the door open for the court to consider NSN’s so-called ‘stalking horse’ bid. NSN said this week it is prepared to increase its US$650 million bid for Nortel’s mobile business if other suitors table higher offers.