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Nortel chief resigns as firm unwinds

NORTEL Networks, the bankrupt Canadian telecoms equipment maker, yesterday said that its chief executive Mike Zafirovski had stepped down as the firm gets closer to being wound down.<br /><br />Zafirovski&rsquo;s departure had been expected since the company, which was once North America&rsquo;s biggest telecoms manufacturer, filed for court protection from creditors at the start of this year.<br /><br />Investors and analysts had applauded the appointment of the ex-Motorola president when he joined Nortel in late 2005, hailing him a turnaround expert who could turn Nortel into a consistently profitable and stable company &ndash; something that no one else had managed.<br /><br />But Nortel filed for protection from creditors in January this year, blaming the recession for derailing its turnaround. It has since started selling off its divisions, including a $1.13bn (&pound;686m) deal to sell wireless assets to Sweden&rsquo;s Ericsson.<br /><br />Nortel&rsquo;s enterprise unit is also up for sale and has received a $475m &ldquo;stalking horse&rdquo; bid from Avaya, though higher offers may emerge.<br /><br />The Toronto-based firm also posted a wider quarterly loss and said that its board will shrink from nine directors to three. <br /><br />Nortel said it lost $274m, or 55 cents a share, in the second quarter compared to a loss of $113m, or 23 cents a share, in the previous year. It added that the quarter&rsquo;s loss included reorganisation costs of $130m. <br /><br />Revenue fell 25 per cent to $1.97bn, &ldquo;primarily a result of the continuing economic downturn and the uncertainty created by the creditor protection proceedings&rdquo;. Every one of its main business segments posted revenue declines of at least 20 per cent.<br /><br />No replacement was announced for Zafirovski.