Canada

The Nortel sale, which has emerged as a test of Canadian national economic strategy, will come under the spotlight tomorrow when MPs hold an emergency hearing on the auctioning of the bankrupt company's prized wireless equipment business, The Toronto Star reported. The scene is set for a day of tense, high-stakes exchanges as the Commons industry committee questions executives from Nortel Networks Corp. and Ericsson, the Swedish company that bid $1.13 billion (U.S.) for Nortel assets.

Bankrupt telecommunications giant Nortel Networks Inc. reportedly won approval from courts in Canada and the U.S. on Tuesday to sell off its enterprise solutions business for $475 million, Bankruptcy Law360 reported. Avaya and Nortel announced the agreement in July, but the courts had yet to approve the move for an auction. Under the deal Avaya would purchase Nortel's enterprise solutions business for $475 million as part of Avaya's effort to broaden its reach and strengthen its position in the telecommunications industry, the company said in a July statement.

Lossmaking Montreal diagnostics specialist Adaltis Inc. said Tuesday it has filed for bankruptcy in Canada to effect an orderly liquidation of assets, property and operations, The Montreal Gazette reported. The filing is voluntary and does not include its Chinese operation. The move also ends the July 3 court-granted protection from creditors, Adaltis said. The position of creditors and other stakeholders won't be known until the liquidation procees is completed, the company added. The directors have resigned and RSM Richter Inc. has been named trustee.

Air Canada has secured a $1-billion lifeline with help from the federal government, giving the carrier a crucial infusion of cash to help it survive the recession and avoid another trip through bankruptcy protection, The Globe and Mail reported. The centrepiece of the financial package is a $600-million loan from a syndicate of lenders.

Canada will not make a decision on whether to review Nortel Networks' $1.13 billion sale of wireless assets to Sweden's Ericsson until after a 21-day appeal period is complete, Canadian Industry Minister Tony Clement said on Wednesday, Reuters reported. "We have to first consider whether the Investment Canada Act applies, that's what we're reviewing right now," Clement told reporters in Ottawa. The sale to Ericsson got the blessing of U.S. and Canadian courts on Tuesday. Losing bidders and Nortel creditors can now appeal the ruling.

Arclin, a closely held maker of resins and other construction-related materials, said on Monday it filed for bankruptcy protection in Canada and the United States and that it reached an agreement in principle to restructure its debt with some of its key lenders, Reuters reported. Under the terms of the agreement, Arclin will have its debt reduced to $60 million from $234 million, the company said in a statement. A post-petition financing facility of $25 million is also part of the deal.

The Harper government is facing growing pressure to intervene in the liquidation of Nortel Networks Corp., but shows no signs of supporting an effort by Research In Motion Ltd. to keep assets of the company in Canadian hands, The Globe and Mail reported. In a highly unusual move, Ontario Finance Minister Dwight Duncan joined federal opposition parties in urging Ottawa to act on the Nortel sale, with Mr. Duncan arguing the proposed $1.13-billion foreign acquisition of its wireless division should be blocked.

Nortel Networks, the bankrupt Canadian maker of telecommunications equipment, said over the weekend that Ericsson of Sweden had won an auction of its wireless technologies unit with an offer of $1.13 billion, thwarting a bid by a rival, Nokia Siemens Networks, The New York Times reported. Last month, Nortel signed a deal to sell the division, which is profitable, to Nokia Siemens for $650 million. A bank owned by the Canadian government also agreed to provide $300 million in financing for the deal.

Canadian officials have begun researching whether and what kind of foreign purchases of Nortel Networks assets might be subject to government restrictions, Industry Minister Tony Clement said on Thursday. He told Reuters he was not allowed to review purchases under the Investment Canada Act before there is an agreement, but he has directed his officials to examine what could be subject to the act. "I can't review anything until there is an agreement of purchase and sale, so that's not germane right now because there's still an auction going on," he said.

Quebecor World has emerged from bankruptcy protection in the US and Canada, PrintWeek reported. In a statement, the print giant said it has effectively cancelled its shares and announced new issues of common shares, Class A Convertible preferred shares, and Series I and II Warrants. The new shares are expected to launch on the Toronto stock exchange within 30 days. It said it has drawn down some $540m from its $800m financing facility and has now fully paid back its debtor in possession credit facility.