Flextronics International Ltd said on Tuesday it has withdrawn all objections to the sale of Nortel's wireless technology assets to Ericsson and resolved outstanding issues with the Swedish telecom equipment maker.
Ericsson this weekend won an auction for Nortel's key CDMA and next-generation LTE wireless technologies, which Nortel put on the block after it filed for creditor protection in January.
Flextronics, Nortel's largest supplier, had objected to the proposed sale of the assets to Nokia Siemens Networks -- the original stalking horse bidder for the assets, citing concerns that the sale might affect its contractual rights and claims.
CDMA, or code division multiple access, is the North American wireless technology that lost the battle for global dominance but still has a strong position in some markets. LTE (long term evolution) is a new high-speed wireless technology that is intended to replace current mobile networks.
Flextronics said it will support the proposed sale of the assets to Ericsson in U.S. and Canadian courts, according to a filing in U.S. Bankruptcy Court in Delaware.
Flextronics said that Ericsson will pay it $8 million for some of the obligations due under agreements with Nortel.
The two companies will negotiate a new agreement, once Ericsson completes its acquisition of the Nortel assets.
Ericsson edged out Nokia Siemens and private equity firm MatlinPatterson to win the Nortel assets for $1.13 billion. Nokia Siemens was the runner-up with a bid of $1.03 billion and is the alternate if the Ericsson-Nortel deal falls apart.
Flextronics said it reserves all rights and objections with respect to an alternate sale to Nokia Siemens.
Nortel said in a separate filing that it has resolved objections to its asset sale process from Airvana Inc, OSS Nokalva, Flextronics, the Pension Benefit Guaranty Corp and other parties.
Nortel is still working to resolve objections raised by Sprint Nextel, Motorola Inc and SNMP Research International Inc.
Judge Kevin Gross in Delaware is due to hear objections, later on Tuesday, to the proposed sale of the wireless technology assets to Ericsson. The case number in the U.S. Bankruptcy Court, District of Delaware is 09-10138.
(Reporting by Euan Rocha; editing by Janet Guttsman)