Canada

Insolvent Nortel Networks Corp. has a preliminary agreement to sell its Multi Service Switch business for US$39 million in cash, The Canadian Press reported. The former Canadian technology giant, which is being dismantled and sold under court protection, said the bid was submitted by PSP Holding LLC, an entity formed by Ottawa-based Samnite Technologies Inc. and Marlin Equity Partners. The Multi Service Switch business provides non-optical equipment and as of last fall employed about 300 people. Nortel did not provide current employee numbers in its announcement.

AbitibiBowater Inc., the world’s biggest newsprint maker by capacity, won court approval to borrow as much as $1.35 billion to help fund its exit from bankruptcy, Bloomberg reported. U.S. Bankruptcy Judge Kevin J. Carey gave the company permission to obtain the funds after no objection to the financing proposals was filed, according to court documents filed yesterday in Wilmington, Delaware. Units of JPMorgan Chase & Co., Barclays Plc and Citigroup Inc. will be the agents for a $600 million asset-based loan and each will contribute $100 million, court papers show.

Canada agreed Tuesday to pay newsprint maker AbitibiBowater more than $100 million to settle the company's claim over what it said was an illegal seizure of its assets, the Associated Press reported. The forestry giant had sought $500 million under the provisions of the North American Free Trade Agreement after Canada's Atlantic-coast province of Newfoundland expropriated some of its assets.

A potential "white knight" offer has emerged for Tagish Lake Gold Corp., which has been fending off a takeover by New Pacific Metals Corp, The Canadian Press reported. Tagish Lake said Monday it has been approached by YS Mining Company Inc. and its two shareholders, Yukon-Nevada Gold Corp. and Northwest Nonferrous International Investment Company Ltd. They are proposing the formation of a new company to own Tagish's Mt. Kukum property and YNG's Ketza River gold property.

The McCormick Macnaughton Caterpillar dealership in the Republic has been taken over by Canadian firm Finning, but the group’s rental businesses have ceased trading, The Irish Times reported. Assets belonging to three rental-related companies in the McCormick Macnaughton group, including three premises, will be sold off at an auction scheduled for September 4th. Management at Finning, the world’s largest Caterpillar dealer, took over the running of the dealership in west Dublin on Monday.

AbitibiBowater Inc. is seeking to quickly strike a deal in connection with a proposed bankruptcy-exit financing package of up to $750 million, Dow Jones Daily Bankruptcy Review reported. The pulp-and-paper company is asking the U.S. Bankruptcy Court in Wilmington, Del., to schedule an Aug. 25 hearing at which it would consider allowing AbitibiBowater to enter into agreements with Barclays Capital Inc., Citigroup Global Markets Inc. and J.P. Morgan Securities Inc., which have agreed to manage a $750 million notes offering.

A U.S. federal magistrate has shielded Nortel Networks Corp. from action by U.K. pension regulators who fear the troubled company will walk away from obligations to 40,000 retirees, leaving a $3.4 billion funding shortfall, Dow Jones Daily Bankruptcy Review reported. Recommendations issued Thursday by U.S. Magistrate Judge Mary Pat Thynge relieve the company of worry that the U.K.'s Pension Regulator will intrude as Nortel negotiates a bankruptcy exit plan, at least until a federal district judge reviews and acts on Thynge's recommendations.

The empire of Alberta's premier chocolate maker is melting after 27 years of providing high-end treats, The Calgary Herald reported. Debt problems brought on by slumping sales and an ill-timed real estate buy forced Chocolaterie Bernard Callebaut into receivership Tuesday, leaving roughly 210 employees at 30 stores and the Calgary factory and headquarters under the control of a court-appointed financial services firm. Vic Kroeger, senior vice-president with Deloitte & Touche in Calgary, said raising new capital is probably the company's "only hope" of survival.

Canadian authorities canceled two Mexico City-bound flights from airline Mexicana de Aviacion on Thursday amid mounting concerns over the financial health of the company, Reuters reported. The flights, set to depart from Montreal and Calgary, were canceled due to a request to Canadian authorities from an unnamed creditor seeking clarification on Mexicana's debt situation, the airline said in a release.

Despite hundreds of millions of dollars in orders and enough public support and goodwill to sink a ship, Canada's oldest and most prestigious shipyard, Davie Yard, is once again floundering. And it risks going under for good if a major financial or strategic investor isn't found by Sept. 15, The Montreal Gazette reported. "We're looking for a third party to invest or to buy assets," said Pierre Laporte, a chartered accountant and bankruptcy trustee with Samson Belair Deloitte Touche, who has been in charge of the file since Feb.