Electronics Production |
Flextronics has exposure to Nortel bankruptcy
As earlier reported Nortel Networks Limited and certain of its other subsidiaries has gone bankrupt on Wednesday. Nortel Networks Limited has entered into an amendment to arrangements with its key supplier, Flextronics.
According to a Nortel statement, these amendments give Nortel Networks Limited confidence that Flextronics will continue to maintain the supply chain following commencement of the proceedings. Under the terms of the amendment, Nortel Networks Limited has agreed to purchase US$120 million of existing inventory by July 1, 2009 and to make quarterly purchases of other inventory and to terms relating to payment and pricing. The amendment is subject to Canadian court approval in connection with the CCAA proceedings noted above. Certain arrangements with Flextronics will terminate in July of 2009 as a result of the exercise by Flextronics of its termination rights under such agreement, while the other arrangements between the parties will continue in accordance with their terms, as amended.
