Nortel chief resigns as firm unwinds

EL N

EL 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.