Friday, January 16, 2009

Effect of Nortel's bankruptcy on India INC.

Nortel filed for bankruptcy today in the U.S. and Canada. In its Chapter 11 petition in Delaware, U.S. operating unit Nortel Networks Inc. said it had assets of $11.6 billion and debt of $11.8 billion as of Sept. 30. The company had about $2.3 billion in cash on that date, according to a quarterly report to shareholders.

India companies have less exposure to this Canadian Giant.
The company which has maximum exposure is Sasken Comm. Nortel has arround 10% stake in Sasken. This is one company which can be affected maximum.
Infosys , TCS and Wipro also have less exposure to Nortel.
Nortel also provides equipments to BSNL, RCom and Bharti Airtel but this segment would not be affected as it is a profit making one.

Nortel has $2.3 billion of cash reserves and could have survived till 2010. But then too it filed for bankruptcy in USA, Canada and Europe.
PS - Indian companies don't have much exposure on Nortel. Some effect may be seen on Indian Companies. But Satyams effect will last longer !

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