The so-called Global Resolution garnered support from two-thirds of the company’s First Lien Debt holders and two-thirds of Second Lien Note holders.
Avaya’s brass call this a major milestone in what’s been a year-long process — a milestone that is good news for everyone involved with the company, including partners.
“It was our goal all along to reach a Plan of Reorganization that is fully supported by all of our major creditor groups,” said Jim Chirico, Avaya’s president and CEO. “With a consensus‑backed Plan and exit financing commitments in hand, we are closer than ever to emerging as a stronger, more competitive company. These developments are good news not only for Avaya, but for our customers and partners as well.”
Avaya expects a debt of slightly less than $3 billion when it emerges from bankruptcy protection — that’s about half of the debt load it carried going in. The company has launched a plan to begin paying it off once bankruptcy is in the rearview mirror. Avaya expects a revised capital structure will help it save more than $200 million in annual interest payments compared to 2016.
Brendan Read, senior industry analyst of digital transformation at Frost & Sullivan, told Channel Partners earlier this year that he expects Avaya to be a stronger company coming out of bankruptcy than when it went in.
“Avaya has a strong customer base, brand reputation, and solutions pedigree, and it continues to enhance its applications, such as with its just-released Avaya IP Office Contact Center 10,” he said. “… Avaya is well-placed to continue to build on, or acquire, and aggressively market innovative and integrated automated and live assistance multichannel voice, text and video customer contact and unified communications applications … ”
Avaya partners such as Kenneth Heitner, president and CEO of Consolidated Technologies, expressed relief at the filing in January.
“As ironic as is sounds, the news of the chapter 11 reorganization was almost a positive — because the prior uncertainty was worse than the action of addressing the debt,” Heitner told us.
Avaya has been wheeling and dealing since last winter’s announcement. It sold its networking business to Extreme Networks for $100 million in July. Many expected the company to sell its contact-center business as well, but Avaya chose to hang on to it.
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September 24 2018 @ 18:15:10 UTC