WRAL Tech Wire

Northern Ireland development agency demands more than $11M back from Nortel

Telecommunications gear maker Nortel must pay back more than $11 million in economic development funds due to cutbacks at its facility in Northern Ireland, says Invest NI.

The economic development agency filed a claim with Nortel on Monday that the company repay the grants. Nortel, which filed for bankruptcy in January, has scaled back operations in the United Kingdom as part of its cost-cutting measures.

“When Invest NI pays grants to a client company to create or safeguard employment the company is legally obliged to maintain that employment for a period of time,” an agency spokesperson told the Belfast Telegraph newspaper. “Nortel entering administration is a breach of its agreement with Invest NI and therefore a claim has been filed for recovery from the administrator.”

Whether the grants will be repaid is unknown.

“We recognize that (Invest NI) is a significant creditor but we are not in a position to agree claims at this stage in the administration process,” a spokesman for Nortel’s administrators Ernst & Young told the Telegraph.

Nortel has already repaid more than $20 million in other grants due to earlier reductions, according to the BBC.

Also, Monday, Nortel did announce a four-year global equipment agreement with BT, the British telecommunications company. Financial terms were not disclosed.

"This new deal is very good news for our customers,” said Lewis Lyell, managing director of convergence business sales for BT Global Services. "This new deal is very good news for our customers. It demonstrates our ability to deliver value to customers even in the toughest market conditions."