UPDATE - New Nortel CEO says plan to stay for the long term
Wednesday April 28, 4:03 pm ET
By Jeffrey Hodgson
TORONTO, April 28 (Reuters) - Nortel Networks Corp.'s (Toronto:NT.TO - News; NYSE:NT - News) new chief executive is there for the long haul at the helm of North America's largest telecom equipment maker, he told Reuters on Wednesday.
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Retired U.S. admiral William Owens, speaking on his first full day in the job, said he intends to lead the company beyond the completion of an accounting review that led to the firing of CEO Frank Dunn and Nortel's two top financial executives.
"You should envision me as the longer term leader of Nortel. This was not taken as a caretaker or interim CEO and my commitment is for the long term," Owens said in one of his first interviews as Nortel boss.
"I come here having given a lot of thought in a relatively compressed period of time as to what this is about."
Brampton, Ontario-based Nortel shocked investors when it said it would fire the three executives and restatements would halve its 2003 earnings.
Owens, the former vice chairman of the U.S. Joint Chiefs of Staff and a Nortel director since February 2002, said his top priority was to complete the review while still serving Nortel customers -- a group that includes many of the world's biggest phone companies.
"We must get this independent review and the auditing issues behind us...not just to get it behind us, but to come out of that with a sense of transparency and trust and credibility in the marketplace," he said.
"We want to be very financially accountable of course, but while we're doing that, we are also building the business. And the business side of this, the operational business side is going well."
Owens said Nortel had seen particularly strong demand for its wireless products in the first quarter and bookings were "especially good".
He would not estimate how long it would take to complete the review, which was launched last year and was initially expected to wrap up in a few months.
"You've seen the actions that have been taken here. We mean business about it and I'm quite optimistic that while this may take us some number of weeks to get through this, we will come out of it strong."
The restatements and delayed results have raised the risk Nortel could face an "event of default and acceleration" of its debt. But the company said it had about $3.6 billion in cash at the end of the first quarter.
Owens declined to say if Nortel would use the cash if the debt comes due ahead of term, or if it would seek alternative financing.
"We will be working with the debt holders. We feel very confident of our ability to do the right thing with that cash. Both the CFO and I are comfortable with where we are with that. So we think there's sufficient liquidity," he said.
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