SAN JOSE, Calif., April 4 -- Bookham Inc., a provider of optical components, modules and subsystems, announced it has entered into an agreement with Nortel Networks Corp. to amend the current supply agreement and secured loan notes between the two companies.
As part of the agreement, Bookham said it expects to receive orders from Nortel Networks for shipment, over the next 12 months, of approximately $50 million worth of products that Bookham is discontinuing as part of its transfer of product assembly production to Shenzhen, China. Bookham said it also expects to receive purchase order commitments from Nortel for current products covering its demand over the next 12 months. In addition, Bookham and Nortel have agreed to product pricing increases and amended payment terms for a 12-month period.
Nortel and Bookham are working to finalize the amount of the purchase commitment for the ongoing products, which is expected to be completed in the next 15 days. The agreement will expire on April 29 if definitive documentation is not entered into before then.
Bookham and Nortel have also agreed to adjustments in the collateral and prepayment provisions for a 12-month period for the senior secured loan notes between Bookham and Nortel.
"We believe this arrangement will enable us to provide enhanced delivery service to Nortel, an important and valued customer and a leader in the optical equipment space," said Giorgio Anania, president and CEO of Bookham. "I anticipate that this latest agreement with Nortel, in particular the expected orders, will have a positive impact on our financial performance beginning in our fiscal fourth quarter. This agreement will also enable Bookham to maintain its schedule for the successful transfer of production capabilities to China."
For more information, visit: www.bookham.com