Shares of Dragonwave (Dragonwave Stock Quote, Chart, News: TSX:DWI) are spiking today after announcing it has renewed its contract with Nokia Siemens Networks, and made changes to it working arrangement management says will strengthen the working relationship between the two companies.
Dragonwave, which supplies microwave radios to Nokia Siemens, will be helped out by with an immediate cash payment of 10.6 million euros. The company says this cash injection, along with undefined periodic financial support, will clear the contingent receivable on DragonWave’s balance sheet, and allow it to continue to supply Nokia Siemens with products at competitive prices.
CEO Peter Allen said the revised arrangement will create a leaner organization.
“The new arrangements being announced today are intended to streamline our operations and customer outreach strategy to better serve Nokia Siemens Networks and its customers. We look forward to continuing to pursue market opportunities together with Nokia Siemens Networks,” he said.
The Ottawa-based Dragowave also today announced that, as part of recent cost reduction measures, it has reduced its senior management positions by a third.
News of the deal has sent shares of Dragonwave northward. At press time, shares of the company on the TSX were up 15% to $1.84.