Bankrupt Canadian telephone equipment maker Nortel has been granted permission to reduce the price of its Carrier VoIP and Application Solutions (CVAS) business, which it sold to Genband almost 17 months ago, by $25 million.

Genband paid $182.5 million for the assets of the business into an escrow account in May, after challenging the price formula that was used.

Canadian and U.S. judges overseeing the liquidation of Nortel agreed to allow the reduction to $157.7 million.

"These resolutions move the matter toward the ultimate resolution of the case," U.S. Bankruptcy Judge Kevin Gross said in Wilmington, Delaware. The price adjustment was also approved by Ontario Superior Court Judge Geoffrey Morawetz in Toronto.

For more:
- see this Bloomberg article

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Nortel CVAS (Carrier VoIP and Application Solutions) unveiled new wireless and 4G mobile VoIP solution enhancements. According to Nortel, the enhancements equip carriers to deliver “a superior user experience, reduce network deployment costs and speed time to market.”

Well, it looks like GENBAND will be officially acquiring Nortel Carrier VoIP and Application Solutions (CVAS). Yesterday, Nortel announced that it would not be proceeding to auction, and instead would be working towards closing the sales agreement with GENBAND for the CVAS unit.

The Nortel/GENBAND deal is for all the global assets of Nortel's CVAS business for a purchase price of $282 million. This number is subject to balance sheet and other adjustments that are approximately $100 million which would add up to a net purchase price of $182 million. The deal will transfer all of CVAS' patents and products for softswitching, gateways, SIP applications, TDM products and services, as well as any intelectual property and customer agreements to GENBAND.

GENBAND proposed the bid around Christmas last year and got court approval both in the U.S. and Canada in early January. Although the bidding was open to challengers since then, it seems that Nortel CVAS has found its buyer.

For more:
- read this release

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Nortel has obtained Canadian and U.S. court approval for GENBAND's stalking horse agreement as well as bidding procedures for the sale of its Carrier VoIP and Application Solutions business.

Nortel announced that at a joint hearing it obtained orders from the United States Bankruptcy Court for the District of Delaware and the Ontario Superior Court of Justice approving the stalking horse sale agreement with GENBAND. The sale will be for all of the assets of its North America, Caribbean and Latin America and Asia Carrier VoIP and Application Solutions business. Other parts of the business were also named in the agreement and would be sold separately to GENBAND including the Europe, Middle East and Africa CVAS business.

The courts also ordered an auction allowing other bidders to submit higher or better offers for the CVAS business by a Feb. 23, 2010 deadline. The auction will take place Feb. 25 and the final sale will still need U.S. and Canadian approval.

For more:
- see the release

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Looks like Nortel's plugging away in the face of adversity payed off a little. The company may not have posted the brightest Q3 earnings report, but its VoIP results looked good.

Nortel managed to narrow its ongoing losses from $3.41 billion in Q3 2008 to $508 million in Q3 2009. But it reported that revenue declined from $1.6 billion in Q3 08 to $1.05 billion.

The highlight of Nortel's latest earnings report really was the VoIP division, though. Amongst the doom and gloom, Nortel's Carrier VoIP and Applications Solutions (CVAS) unit saw its revenues increase. "CVAS revenues in the third quarter of 2009 were $208 million, an increase of 14 percent compared with the year ago quarter due to contract deliveries and project completions in the third quarter of 2009," Nortel claimed in its earnings release.

So the rise in VoIP revenue was due to closing up various projects it was already working on, but revenue was still up, right?

For more:
- see the official company release here

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