Nortel deal collapse leads to potential £15 million shortfall (From East London and West Essex Guardian Series)

Nortel deal collapse leads to potential £15 million shortfall

10:24am Saturday 11th July 2009 in

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THE first breakdown of a London 2012 sponsorship deal has lead to a potential £15 million shortfall.

Games bosses have cancelled a contract with communications technology company Nortel, which filed for bankruptcy earlier this year. The company were signed up as one of the 2012’s main sponsors and the Games official telecoms provider.

Cisco Systems is in place as a replacement but on a less lucrative deal, which has led to the shortfall.

London 2012 said that Nortel is "no longer able to maximize the value of its investment", but insisted the change was “not a big blow”.

Last month a shortfall of between £60m to £100m was discovered in the Games’ budget, which is linked to compensation for firms forced to move from the Olympic Park in Stratford.

A lack of private investment has also forced organisers to use several hundred million pounds of the £2.7bn contingency fund.