Avaya announced today that the United States Bankruptcy Court for the Southern District of New York (the “Court”) has confirmed its second amended chapter 11 plan of reorganization (the “Plan”). As a result, Avaya expects to emerge from its restructuring process before the end of this year.
“The Court’s approval of our plan is the culmination of months of hard work and extensive negotiations among our various stakeholders,” said Jim Chirico, Avaya’s President and CEO. “In the coming weeks, Avaya will emerge from this process stronger than ever and positioned for long-term success, with the financial flexibility to create even greater value for our customers, partners and stockholders.”
Avaya projects to have approximately $2.925 billion of funded debt and a $300 million senior secured asset-based lending facility available upon emergence from chapter 11 protection, a substantial reduction from the approximately $6 billion of debt on its balance sheet when Avaya commenced its financial restructuring. This revised capital structure is expected to result in more than $200 million in annual cash interest savings compared to fiscal year 2016.
“I want to thank our customers and partners for their continued support,” Chirico said. “The trust and loyalty of our global customer base and partner network have played a vital role in Avaya’s success throughout this process.”
“I also want to thank our dedicated and driven employees, who have remained focused on delivering the innovative solutions and industry-leading service that our customers expect from us,” Chirico continued. “I look forward to working with our employees, customers and partners as we write the next chapter of the Avaya story.”
Centerview Partners LLC and Zolfo Cooper LLC are Avaya’s financial and restructuring advisors and Kirkland & Ellis LLP is the Company’s restructuring counsel.
Avaya is a leading global business communications company, providing an expansive portfolio of software and services for contact center and unified communications — offered on premises, in the cloud, or as a hybrid. Today’s digital world requires communications enablement, and no other company is better positioned to do this than Avaya. For more information, please visit www.avaya.com.
Cautionary Note Regarding the Chapter 11 Cases
The Company’s security holders are cautioned that trading in securities of the Company during the pendency of the Company’s chapter 11 proceeding will be highly speculative and will pose substantial risks. It is possible some or all of the Company’s currently outstanding securities may be cancelled and extinguished upon the effective date of a restructuring plan by the United States Bankruptcy Court for the Southern District of New York. In such an event, the Company’s security holders would not be entitled to receive or retain any cash, securities or other property on account of their cancelled securities. Trading prices for the Company’s securities may bear little or no relation to actual recovery, if any, by holders thereof in the Company’s chapter 11 proceeding. Accordingly, the Company urges extreme caution with respect to existing and future investments in its securities.