Alvarion sold an old debt of Nortel Networks for 5.2 Million Dollars

4 November, 2012

The debt originated from a strategic deal between the two companies back in June 2008: They signed a strategic agreement to create an end-to-end WiMAX solution, based on Nortel's networking know-how and Alvarion's expertise in mobile WiMAX solutions. But things went wrong

The struggling wireless network equipment producer Alvarion (NASDAQ:ALVR), found a new source of capital.

The company said it has signed a definitive agreement to sell its claims right against Nortel Networks Limited for a total of approximately $5.2 million. The debt originated from a strategic deal between the two companies back in June 2008: They signed a strategic agreement to create an end-to-end WiMAX solution, based on Nortel’s networking know-how and Alvarion’s expertise in mobile WiMAX solutions. But things went wrong. A few months later Nortel abandoned its WiMAX plans, and left Alvarion unpaid for equipment and R&D expanses due to the agreement.

A few weeks ago Alvarion found another source of capital: the company announced the sale of part of its patent portfolio to Wi LAN Inc. The company is focused in the business of protecting and monetizing patented inventions. Today WiLAN’s intellectual property (IP) portfolio includes more than 3,000 patents licensed to technology companies.

Alvarion received $8.5 million at closing, with the balance due after meeting certain conditions, primarily the receipt of an approval from the Office of the Chief Scientist in Israel. In addition, Alvarion was granted a royalty-bearing license for the patent portfolio sold to Wi LAN. “This will support our cash needs”, said Hezi Lapid, President and CEO of Alvarion.

In the second quarter of 2012, Alvarion’s revenues were $33.8 million, a decrease of 39% from $55.4 million in the second quarter of 2011. The company said lately it believes revenues in the third quarter of 2012 will be in the range of $31 million to $39 million.

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