Nortel Networks Corp. (TSX:NT) announced Wednesday it plans to sell its majority stake in LG-Nortel, a Korean joint venture formed in 2005 with LG Electronics.

Toronto-headquartered Nortel, which has been restructuring under court supervision since January, said LG-Nortel is a profitable, standalone business that has not filed for creditor protection.

However, according the company's latest financial results, the joint venture's revenue in the first quarter fell by two-thirds to $188 million from last year as a major contract came to an end.

Nortel's net loss for the three months ended March 31, reported in U.S. currency, was $507 million, or $1.02 per share, and compared to a year-ago loss of $138 million, or 28 cents per share. Overall revenue fell to $1.73 billion, down 37 per cent from $2.76 billion.

When the company filed for protection under Chapter 11 of the U.S. bankruptcy law and the Companies' Creditor Arrangement Act in Canada, it said it planned to sell non-core assets and restructure as a more focused company.

However, since then, there have been reports that even Nortel's core assets could be sold — with rival Nokia Siemens considered a potential buyer for its carrier business and Avaya a potential suitor for the enterprise division, which sells to businesses.

LG-Nortel was established in 2005, one of the diversification initiatives of former Nortel chief executive Bill Owens, predecessor to current CEO Mike Zafirovski.

The joint venture provides telecommunications equipment and network systems to service provider and business customers in Korea and around the world.

"This proposed divestiture represents the best path forward for LG-Nortel, its customers and employees," Peter MacKinnon, LG-Nortel's chair and general manager, said in a statement.

Nortel's shares closed Wednesday at 21.5 cents Cdn, down a penny, on the Toronto Stock Exchange.