San Francisco - Telephone equipment giant Nortel filed for bankruptcy protection Wednesday, as the credit squeeze left the former high-flying tech company unable to pay its debts. The court filing in Wilmington, Delaware, came a day before the company was due to make a 107 million dollar interest payment on a loan, and after the company has lost over 7 billion dollars since 2005 as it made bad bets on developing cellphone and other telecommunications technologies that were not widely adopted in the market.
Nortel said it was also seeking protection under Canada's Companies' Creditors Arrangement Act.
The 114-year-old Canadian company said that it had over 1 billion dollars in assets and owes about 4 billion to creditors.
"The company's normal day-to-day operations are expected to continue without interruption," Nortel said in a statement. "This process will allow Nortel to deal decisively with its cost and debt burden, to effectively restructure its operations and to narrow its strategic focus in an effective and timely manner."
"Nortel must be put on a sound financial footing once and for all," said Nortel President and CEO Mike Zafirovski. "These actions are imperative so that Nortel can build on its core strengths and become the highly focused and financially sound leader in the communications industry that its people, technology and customer relationships show it ought to be."
The company's stock has recently been trading at around 20 cents per share - compared to a high of almost 900 dollars at the peak of the tech boom in 2000.
