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News > Companies
Nortel seeking $1B cash
August 8, 2001: 7:06 p.m. ET

Troubled telecom equipment maker selling notes to raise needed cash
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NEW YORK (CNNfn) - Canadian telecom equipment maker Nortel Networks Corp. has announced plans to raise $1 billion through a sale of bonds.

The company, which last month posted a $19.4 billion second-quarter loss that was one of the largest in corporate history, will seek to raise funds despite a debt rating that is barely investment grade. But it has announced deep staff cuts and the elimination of its dividend as it tries to save cash in the face of a sharp downturn in purchases by its telecom customers.

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"Obviously cash conservation is a No. 1 priority as we make sure we get our cost structure in line in this period of very low revenue," CEO John Roth told CNNfn's Before Hours program in June, the day he warned of the problems. "This is an absolute surprise. We've never seen a downturn this rapid."

The company said that the proceeds of the convertible notes it is seeking to sell will be used for general corporate purposes and those of its subsidiaries.

Nortel also has had to indefinitely delay plans for an initial public offering for its lucrative fiber optic division.

Shares of Brampton, Ontario-based Nortel (NT: Research, Estimates) fell 53 cents to $7.62 in trading Wednesday, putting it just above its 52-week low share price, and less than 10 percent of its 52-week high of $83.68 that it hit about a year ago. graphic

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.