Report: Nortel looking to exit LG venture

Nortel looking to sell off its stake in Korean telecom company LG

Nortel is reportedly looking to sell off its stake in a joint venture with Korean telecom company LG in an effort to raise cash.

Nortel, which is reorganizing under Chapter 11 bankruptcy protection, hired Goldman Sachs to find a buyer for its 50% stake in LG-Nortel, the Financial Times reported this week. Goldman Sachs and Nortel both declined to comment, according to the Financial Times report.

The sale might interest private equity groups and global companies looking to enter one of the world's most advanced technology-savvy markets -- Korea, Financial Times reported. Huawei, Providence Equity and the Carlyle Group were noted as possible acquirers in the Financial Times article.

Nortel filed for bankruptcy court protection in mid-January after a dropoff in orders and sales during the current economic downturn. Since then, it has been hammering out a reorganzation plan and reportedly shopping around huge chunks of the company, including its carrier, enterprise and wireless operations.

The reorganization plan is expected to be disclosed by Nortel management this summer.

LG-Nortel was established in 2005. The joint venture posted 2008 revenues of US$1 billion, according to the FT report.

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