TORONTO - Nortel Networks Corp, which is fighting for survival under bankruptcy protection, confirmed on Wednesday it is looking for a buyer for its majority stake in a South Korean joint venture with LG Electronics.

The announcement that Nortel, North America's biggest maker of telephone equipment, would seek to sell its 50 percent plus one share in LG-Nortel came after rumors of the move swirled among analysts and in the media in recent weeks.

The joint venture -- established in late 2005 -- is profitable with a strong balance sheet and did not file for creditor protection as Nortel did in January, the company said on Wednesday.

The business, which sells telecom and network gear, achieved a management operating margin of $341 million in 2008, Nortel said. Nortel defines this as sales less cost of revenue, selling, general and administrative expenses and research and development costs.

Toronto-based Nortel said it will file a motion with the Ontario Superior Court for approval of a proposed sale process, to which LG has agreed. Investment bank Goldman Sachs (GS.N) has been hired to help with the sale.

Nortel collapsed into bankruptcy protection in January, blaming the economic crisis for derailing a turnaround effort that began in 2005.

Experts say that while Nortel's restructuring will include asset sales at what will likely be fire-sale prices, they do not expect one of the most storied names in Corporate Canada to disappear altogether.

Metro Ethernet Networks, the unit that makes Internet infrastructure and includes Nortel's optical and carrier ethernet technology, has been seen by some analysts as the core of a stripped-down Nortel after the rest of the company is sold off.

The MEN unit includes technology that lets telecom companies quadruple the capacity of their networks using fiber-optic cables thinner than a human hair.

Nortel tried to sell the MEN unit last year, before pulling the plan in early February when no bids materialized. Some analysts blamed the weakening economy for the absence of interest. The MEN business generated $360 million in first-quarter revenue, accounting for about 21 percent of Nortel's total sales.

Nortel's efforts to sell some of its parts have been also complicated by the economic downturn, which has made buyers reluctant and prices lower.

Once an international technology powerhouse, Nortel employed more than 90,000 people in 2000. Today, it employs about 30,000 and that number is dropping.

Nortel's stock trades at just 21.5 Canadian cents on the Toronto Stock Exchange, down from its consolidation-adjusted high of more than C$1,100 during the technology boom.

($1=$1.12 Canadian)

(Reporting by Wojtek Dabrowski; editing by Peter Galloway)

Electronics LG