Nortel Announces Cease Trade Order Issued by Alberta Securities Commission

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 Media Relations
MediaRelations@nortel-canada.com 

 Nortel Announces Cease Trade Order
Issued by Alberta Securities Commission

 

TORONTO – Nortel* Networks Corporation (“NNC”) [OTC: NRTLQ] and Nortel Networks Limited (“NNL”) announced that they have received notice from the Alberta Securities Commission (“ASC”) that the ASC has issued a cease trade order (“CTO”), dated May 13, 2013, in respect of the securities of NNC and NNL for their failure to file certain periodic disclosure documents.

The CTO prohibits trading and purchasing of any securities of NNC or NNL, effective as of May 13, 2013, other than (i) trades or purchases for nominal consideration for the purposes of permitting a security holder to crystallize a tax loss (a “tax loss trade”); or (ii) trades or purchases of notes of either NNC or NNL to or by an entity that qualifies as an “accredited investor” as that term is defined under applicable Canadian securities laws (an “accredited investor trade”). The aforementioned exceptions are subject to the further qualifications that: (1) in the case of a tax loss trade, a copy of the CTO is provided to the purchaser and the seller receives a written acknowledgement from the purchaser that the securities acquired remain subject to the CTO; and (2) in the case of an accredited investor trade in notes of NNC or NNL, the purchaser will be deemed (by reason of the issuance of this news release and the posting of the CTO on the Restructuring Document Centre website of Ernst & Young Inc., as monitor of NNC and NNL in their Canadian creditor protection proceedings, at http://documentcentre.eycan.com/Pages/Main.aspx?SID=89&redirect=1) to have received notification of the terms of the CTO and deemed to have acknowledged to the seller that the notes acquired remain subject to the CTO. The full text of the CTO accompanies this news release marked as Annex A.

Annex A

ALBERTA SECURITIES COMMISSION
CEASE TRADE ORDER

Citation: Nortel Networks, Re, 2013 ABASC 200                                                    Date: 20130513

Nortel Networks Corporation and Nortel Networks Limited

Background

1. Nortel Networks Corporation (NNC) and Nortel Networks Limited (NNL) (collectively,the Issuers) are reporting issuers under the Securities Act, R.S.A. 2000, c. S-4 (the Act) and have failed to file the following periodic disclosure pursuant to section 146 of the Act:

(a) annual audited financial statements, annual management’s discussion and analysis, and certification of annual filings for the year ended 31 December 2012; and

(b) interim unaudited financial statements, interim management’s discussion and analysis, and certification of interim filings for the interim period ended 31 September 2012.

2. Pursuant to an Authorization Order dated 31 October 2012, the undersigned is authorized to make orders under section 33.1 of the Act.

Decision

3. Under section 33.1 of the Act, it is ordered that trading and purchasing cease in respect of any security of the Issuers, except for the trades and purchases identified below, until this order has been revoked or varied.

4. This order does not apply to the following trades and purchases:

(a) a trade to and a purchase by a person’or company in a Security of either of the Issuers for nominal consideration for the purpose of permitting security holders of the Issuer to crystallize any losses for tax purposes provided that, prior to such trade and purchase, suchperson or company:

(i) receives a copy of this order; and

(ii) provides written acknowledgment to the seller that the securities of the Issuer remain subject to this order in accordance With its terms following such trade and purchase; or

(b) a trade and purchase of:

(i) NNC, U.S. $575,006,000 principal amount of 1.75% convertible senior notes due 2012 and U.S. $575,000,000 principal amount of 2.125% convertible senior notes due 2014 (collectively, the NNC Notes); or

(ii) NNL, U.S. $1,000,000,000 principal amount of floating rate senior notes due 2011, U.S. $550,000,000 principal amount of 10.125% senior notes due 2013, U.S. $1,125,000,000 principal amount of 10.750% senior notes due 2016 and U.S. $200,000,000 principal amount of 6.875% notes due 2023 (collectively, the NNL Notes);

to or by a person or company who is an “accredited investor” as defined in National Instrument 45-106 Prospectus and Registration Exemptions, provided that, prior to such trade and purchase either:

 (iii) such person or company receives a copy of this order and provides written acknowledgment to the seller that the NNC Notes or NNL Notes (as applicable) remain subject to this order in accordance with its terms following such trade and purchase; or 

(iv) the Issuers shall have issued a news release disclosing the terms of this order and Ernst & Young Inc. (the Monitor) shall have posted a copy of this order on its website, in which case each such person or company is deemed to have received notification of the terms of this order and is deemed to have acknowledged to the seller that the NNC Notes or NNL Notes (as applicable) remain subject to this order in accordance with its terms following such trade and purchase:

 13 May 2013

 ”original signed by”
Jonathan Taylor
Manager, CD Compliance & Market Analysis

 

About Nortel

For more information, please visit Nortel Networks Corporation’s website at www.nortel-canada.com.

 

Legal Disclaimer

Certain statements in this press release may contain words such as “could”, “expects”, “may”, “should”, “will”, “anticipates”, “believes”, “intends”, “estimates”, “targets”, “plans”, “envisions”, “seeks” and other similar language and are considered forward-looking statements or information under applicable securities laws. These statements are based on Nortel’s current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which Nortel operates. These statements are subject to important assumptions, risks and uncertainties that are difficult to predict, and the actual outcome may be materially different. Nortel’s assumptions, although considered reasonable by Nortel at the date of this press release, may prove to be inaccurate and consequently Nortel’s actual results could differ materially from the expectations set out herein.

Actual results or events could differ materially from those contemplated in forward-looking statements as a result of the following: (i) risks and uncertainties relating to the Creditor Protection Proceedings including: (a) risks associated with Nortel’s ability to: obtain required approvals and successfully consummate remaining divestitures; successfully conclude ongoing discussions for the sale of Nortel’s remaining assets; develop, obtain required approvals for, and implement a court approved plan; allocation of the sale proceeds of our businesses and assets among the various Nortel entities participating in these sales may take considerable time to resolve; resolve ongoing issues with creditors and other third parties whose interests may differ from Nortel’s; maintain adequate cash on hand in each of its jurisdictions to fund remaining work within the jurisdiction during the Creditor Protection Proceedings; obtain any further required approvals from the Canadian Monitor, the U.K. Administrators, the U.S. Principal Officer, the U.S. Creditors’ Committee, or other third parties; utilize net operating loss carryforwards and certain other tax attributes in the future; avoid the substantive consolidation of NNI’s assets and liabilities with those of one or more other U.S. Debtors; operate effectively, and in consultation with the Canadian Monitor, the Canadian creditors’ committee,  the U.S. Creditors’ Committee, the U.S. Principal Officer,and work effectively with the U.K. Administrators and French Administrator in their respective administration of the EMEA businesses subject to the Creditor Protection Proceedings; continue as a going concern; actively and adequately communicate on and respond to events, media and rumors associated with the Creditor Protection Proceedings; retain and incentivize key employees as may be needed; retain, or if necessary, obtain court orders or approvals with respect to motions filed from time to time; resolve claims made against Nortel in connection with the Creditor Protection Proceedings for amounts not exceeding Nortel’s recorded liabilities subject to compromise; prevent third parties from obtaining court orders or approvals that are contrary to Nortel’s interests; and (b) risks and uncertainties associated with: limitations on actions against any Debtor during the Creditor Protection Proceedings; the values, if any, that will be prescribed pursuant to any court approved plan to outstanding Nortel securities and, in particular, that Nortel does not expect that any value will be prescribed to the NNC common shares or the NNL preferred shares in any such plan; the delisting of NNC common shares from the NYSE; the delisting of NNC common shares and NNL preferred shares from the TSX and; any cease trade orders that are expected to be issued by Canadian Securities Administers to prohibit trading in securities of NNC and NNL following the third quarter filing deadlines applicable to NNC and NNL’s quarterly reporting obligations under Canadian securities laws; and (ii) risks and uncertainties relating to Nortel’s remaining restructuring work including fluctuations in foreign currency exchange rates; the sufficiency of workforce and cost reduction initiatives; any adverse legal judgments, fines, penalties or settlements related to any significant pending or future litigation actions; failure to maintain integrity of Nortel’s information systems; and Nortel’s potential inability to maintain an effective risk management strategy.

For additional information with respect to certain of these and other factors, see Nortel’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other securities filings with the SEC. Unless otherwise required by applicable securities laws, Nortel disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

*Nortel, the Nortel logo and the Globemark are trademarks of Nortel Networks.