Nortel Networks

Nortel Declares Preferred Share Dividends

    Toronto, Canada (ots/PRNewswire) - The board of directors of Nortel Networks Limited today declared a  dividend on each of the outstanding Cumulative Redeemable Class A Preferred  Shares Series 5 (TSX: NTL.PR.F) and the outstanding Non- cumulative  Redeemable Class A Preferred Shares Series 7 (TSX: NTL.PR.G). The dividend  amount for each series is calculated in accordance with the terms and conditions applicable to each respective series, as set out in the Company's articles. The annual dividend rate for each series floats in  relation to changes in the average of the prime rate of Royal Bank of  Canada and The Toronto-Dominion Bank during the preceding month ("Prime")  and is adjusted upwards or downwards on a monthly basis by an adjustment  factor which is based on the weighted average daily trading price of each  of the series for the preceding month, respectively. The maximum monthly  adjustment for changes in the weighted average daily trading price of each  of the series will be plus or minus 4.0% of Prime. The annual floating  dividend rate applicable for a month will in no event be less than 50% of  Prime or greater than Prime. The dividend on each series is payable on  August 14, 2006 to shareholders of record of such series at the close of business on July 31, 2006.

    About Nortel

    Nortel is a recognized leader in delivering communications capabilities  that enhance the human experience, ignite and power global commerce, and  secure and protect the world's most critical information. Our next- generation technologies, for both service providers and enterprises, span  access and core networks, support multimedia and business-critical  applications, and help eliminate today's barriers to efficiency, speed and  performance by simplifying networks and connecting people with information.  Nortel does business in more than 150 countries. For more information,  visit Nortel on the Web at www.nortel.com. For the latest Nortel news, visit www.nortel.com/news.

    Certain statements in this press release may contain words such as " could", "expects", "may", "anticipates", "believes", "intends", "estimates ", "plans", "envisions", "seeks" and other similar language and are  considered forward-looking statements or information under applicable  securities legislation. These statements are based on Nortel's current  expectations, estimates, forecasts and projections about the operating  environment, economies and markets in which Nortel operates. These  statements are subject to important assumptions, risks and uncertainties,  which are difficult to predict and the actual outcome may be materially different. Although Nortel believes expectations reflected in such forward- looking statements are reasonable based upon certain assumptions, they may  prove to be inaccurate and consequently Nortel's actual results or events  could differ materially from its expectations set out in this press release . Further, actual results or events could differ materially from those  contemplated in forward-looking statements as a result of the following (i)  risks and uncertainties relating to Nortel's restatements and related matters including: Nortel's most recent restatement and two previous restatements of its financial statements and related events; the negative  impact on Nortel and NNL of their most recent restatement and delay in  filing their financial statements and related periodic reports (including  the anticipated delay in filing the Quarterly Reports on Form 10-Q for the  first quarter of 2006) causing them to breach their public debt indentures  and, if the delay extends beyond June 15, 2006, their obligations under  their credit facilities, with the possibility that the holders of their  public debt or NNL's lenders would seek to accelerate the maturity of that  debt, and causing, if the delay extends beyond June 15, 2006, a breach of NNL's support facility with EDC with the possibility that EDC would refuse  to issue additional support under the facility, terminate its commitments  under the facility or require NNL to cash collateralize all existing  support; legal judgments, fines, penalties or settlements, or any  substantial regulatory fines or other penalties or sanctions, related to  the ongoing regulatory and criminal investigations of Nortel in the U.S.  and Canada; any significant pending civil litigation actions not  encompassed by Nortel's proposed class action settlement; any substantial  cash payment and/or significant dilution of Nortel's existing equity  positions resulting from the finalization and approval of its proposed  class action settlement, or if such proposed class action settlement is not finalized, any larger settlements or awards of damages in respect of such  class actions; any unsuccessful remediation of Nortel's material weaknesses in internal control over financial reporting resulting in an inability to report Nortel's results of  operations and financial condition accurately and in a timely manner; the  time required to implement Nortel's remedial measures; Nortel's inability to access, in its current form, its shelf registration filed with the United States Securities and Exchange Commission (SEC), and Nortel's below  investment grade credit rating and any further adverse effect on its credit  rating due to Nortel's restatement of its financial statements; any adverse  affect on Nortel's business and market price of its publicly traded  securities arising from continuing negative publicity related to Nortel's  restatements; Nortel's potential inability to attract or retain the  personnel necessary to achieve its business objectives; any breach by  Nortel of the continued listing requirements of the NYSE or TSX causing the  NYSE and/or the TSX to commence suspension or delisting procedures; any  default in Nortel's filing obligations extending beyond July 15, 2006 for  the 2006 First Quarter Form 10-Qs, causing any Canadian securities regulatory authority to impose an order to cease all trading in Nortel's  securities within the applicable jurisdiction or to impose such an order  sooner if Nortel fails to comply with the alternate information guidelines  of such regulatory authorities; (ii) risks and uncertainties relating to  Nortel's business including: yearly and quarterly fluctuations of Nortel's  operating results; reduced demand and pricing pressures for its products  due to global economic conditions, significant competition, competitive  pricing practice, cautious capital spending by customers, increased  industry consolidation, rapidly changing technologies, evolving industry standards, frequent new product introductions and short product life cycles , and other trends and industry characteristics affecting the telecommunications industry; any material and adverse affects on Nortel's  performance if its expectations regarding market demand for particular  products prove to be wrong or because of certain barriers in its efforts to  expand internationally; any reduction in Nortel's operating results and any  related volatility in the market price of its publicly traded securities  arising from any decline in its gross margin, or fluctuations in foreign  currency exchange rates; any negative developments associated with Nortel's  supply contract and contract manufacturing agreements including as a result  of using a sole supplier for key optical networking solutions components,  and any defects or errors in Nortel's current or planned products; any negative impact to Nortel of its failure to achieve its business transformation objectives; additional valuation allowances for all or a  portion of its deferred tax assets; Nortel's failure to protect its  intellectual property rights, or any adverse judgments or settlements  arising out of disputes regarding intellectual property; changes in  regulation of the Internet and/or other aspects of the industry; Nortel's  failure to successfully operate or integrate its strategic acquisitions, or  failure to consummate or succeed with its strategic alliances; any negative  effect of Nortel's failure to evolve adequately its financial and  managerial control and reporting systems and processes, manage and grow its  business, or create an effective risk management strategy; and (iii) risks  and uncertainties relating to Nortel's liquidity, financing arrangements and capital including: the impact of Nortel's most recent restatement and  two previous restatements of its financial statements; any acceleration  under their public debt indentures and credit facilities, which may result  in Nortel and NNL being unable to meet their respective payment obligations ; any inability of Nortel to manage cash flow fluctuations to fund working  capital requirements or achieve its business objectives in a timely manner  or obtain additional sources of funding; high levels of debt, limitations  on Nortel capitalizing on business opportunities because of credit facility  covenants, or on obtaining additional secured debt pursuant to the  provisions of indentures governing certain of Nortel's public debt issues  and the provisions of its credit facilities; any increase of restricted  cash requirements for Nortel if it is unable to secure alternative support  for obligations arising from certain normal course business activities, or  any inability of Nortel's subsidiaries to provide it with sufficient  funding; any negative effect to Nortel of the need to make larger defined  benefit plans contributions in the future or exposure to customer credit  risks or inability of customers to fulfill payment obligations under customer financing arrangements; any negative impact on Nortel's ability to make future acquisitions, raise capital, issue debt and retain employees  arising from stock price volatility and further declines in the market  price of Nortel's publicly traded securities, or any future share  consolidation resulting in a lower total market capitalization or adverse  effect on the liquidity of Nortel's common shares. For additional  information with respect to certain of these and other factors, see the  Company's Annual Report on Form 10-K/A and NNL's Annual Report on Form 10-K  and other securities filings with the SEC. Unless otherwise required by  applicable securities laws, Nortel disclaims any intention or obligation to  update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

    (x) Nortel, the Nortel logo and the Globemark are trademarks of Nortel  Networks.

ots Originaltext: Nortel Networks
Im Internet recherchierbar: http://www.presseportal.ch

Contact:
For further information: Media: Patti Vernon, +1-(905)-863-1035,
patricve@nortel.com; Investors: +1-(888)-901-7286, +1-(905)-863-6049,
investor@nortel.com



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