Outstanding from Nortel to Wipro is $15 mn

Wipro, the country's third largest software services exporter, has stated that outstanding amount from Nortel is $15 million, subject to arbitration.

Wipro has made this statement post Nortel declaring Chapter 11 bankruptcy in the US. Wipro has also added that Nortel contributes 1.5 per cent of its total IT business, which is close to $4 billion.

Chapter 11 is the 11th chapter of the US Bankruptcy Code. It allows for the reorganization, under court supervision, of a company that can't pay its debts. It actually prevents creditors from pushing a company into bankruptcy, by temporarily freezing their claims. When a company files under Chapter 11, it continues to operate, but major business decisions have to be approved by a judge. Usually, the company will come up with a plan to sell assets, and eventually the creditors may get some of their money back.

For Wipro, this is a second jolt after World Bank recently disclosed that it has barred Wipro from bidding for its work for a period of four years from 2007 to 2011. Wipro had said that work from Wipro accounted for less that $1 million for a period of 6 years.