Wireless broadband solutions company Alvarion is announcing that it has signed a definitive agreement to sell its claims right against Nortel Networks Limited for a total of approximately $5.2 million. The closing on the deal is expected to take place next week. As a result, the company will record a capital gain of that amount in the third quarter of 2012.
“We are pleased with the resolution of our claim against Nortel and the additional cash infusion into the company,” said Lior Shemesh, CFO of Alvarion, in a statement announcing the transaction. “Together with the funds received from the IP sale we completed a couple of weeks ago, we significantly strengthened our balance sheet and are in a better position to execute our turnaround plan.”
Tel-Aviv, Israel-based Alvarion manufactures and exports a range of network solutions, including WiMAX, IEEE, PtMP, TD-LTE and Wi-Fi to service providers and enterprises covering a variety of industries such as mobile broadband, residential and business broadband, utilities, municipalities and public safety agencies.
Nortel signed a partnership agreement with Alvarion in 2008 for WiMaX technologies. In 2009, Nortel Networks decided to offload both its mobile WiMax business and its partnership with Alvarion. Nortel, which filed for bankruptcy protection in 2009, said at the time that it preferred to focus its mobile wireless effort on its Long Term Evolution (LTE) technology.
The collapse of the deal in early 2009 hurt Alvarion’s 2008 4Q financial results, as the Israeli company wasn’t able to recognize about $2.4 million in revenue from sales of products to Nortel in that quarter. As a result, Nortel was obligated to pay Alvarion for certain research and development costs it incurred.
Edited by Brooke Neuman