Embattled Canadian telecom giant Nortel Networks ( NT) is rumored to be selling off its stake in a major joint venture with LG Electronics in a bid to boost its cash position.

The Toronto, Ontario-based firm has brought in Goldman Sachs to help sell off its 50% stake plus one share in LG-Nortel, according to the Financial Times. Said to be valued at around $1 billion, the joint venture was founded in 2007 to provide telecom and networking equipment to Korea and other markets such as Russia.

Nortel filed for bankruptcy protection in January, prompting much speculation about the company's future.

Both Nortel and Goldman Sachs declined to comment when contacted by TheStreet.com. LG-Nortel has not yet responded to a request for comment, although rumors that Nortel is carving off key assets have been circulating for months, suggesting that the firm may break itself up rather than emerge from bankruptcy as initially planned.

Earlier this month, for example, The Wall Street Journal reported that the telecom equipment maker had received a bid from Nokia Siemens Networks for its lucrative carrier networks group and a wireless research unit. Nortel has also reportedly received bids from Avaya and Siemens Enterprise Communications for its enterprise division.

Nortel has already sold its Alteon switch technology to Israeli networking firm Radware ( RDWR), and Ciena ( CIEN) is said to be eyeing the firm's metro Ethernet networks business.

Earlier this week Nortel obtained an order from the Ontario Superior Court of Justice extending its bankruptcy protection until July 30. "The purpose of the extension is to allow the Nortel companies to develop a restructuring strategy for consideration by their creditors and Canadian Court," said the company, in a statement.

Last month Nortel appointed restructuring expert David Richardson to its board of directors, in a clear indication that the firm's metamorphosis is gathering pace. Richardson was previously Canadian national managing partner of Ernst & Young's corporate finance practice and served as senior partner in the firm's corporate recovery and restructuring practice.

The company had been wrestling with plummeting sales prior to its original bankruptcy filing. In its recent fourth quarter, Nortel's revenue plunged 15% year over year to $2.72 billion, although this was a 17% increase on the prior quarter.

Carrier networks accounted for the bulk of Nortel's sales with $1.23 billion, although this was 8% less than the prior year's quarter. Enterprise solutions were the next biggest revenue stream, bringing in $535 billion, 30% down on the same period last year.