Nortel Networks limited Series 5 preferred shares

November 1, 2011

1 Min Read

TORONTO -- Nortel Networks Limited ("NNL") announced today that, in light of its ongoing creditor protection proceedings and the other factors mentioned below, NNL will not be following the notification procedures set out in the provisions attaching to its Cumulative Redeemable Class A Preferred Shares Series 5 ("Series 5 Preferred Shares") in connection with the right of holders of Series 5 Preferred Shares to elect to convert such shares, on December 1, 2011, into Cumulative Redeemable Class A Preferred Shares Series 6 ("Series 6 Preferred Shares"), nor will a fixed dividend rate be set for purposes of the dividend rights attaching to the Series 6 Preferred Shares (none of which are currently outstanding).

The principal distinction between the Series 5 Preferred Shares and Series 6 Preferred Shares, aside from their conversion rights, is that the former provide for floating adjustable dividends while the latter provide for fixed dividends, in either case, as and when declared payable by NNL's board of directors.

NNL suspended the declaration of all dividends on its preferred shares in November 2008 and currently is not lawfully able to declare or pay dividends on its preferred shares, nor does it expect to resume the declaration or payment of dividends on its preferred shares at any time in the future. Further, as previously announced, NNL does not expect that holders of its preferred shares (of any series) will receive any value from the creditor protection proceedings and expects that these proceedings will result in the cancellation of such shares.

Nortel Networks Ltd.

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