Avaya and 17 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of New York, case number 17-10089. The Company, which provides telecommunications services, is represented by Jonathan S. Henes of Kirkland & Ellis. The Company states that the filing was initiated “to restructure its balance sheet to better position itself for the future.”
The Company has obtained a committed $725 million debtor-in-possession financing facility underwritten by Citibank. Subject to Court approval, this D.I.P. financing, combined with the Company’s cash from operations, is expected to provide sufficient liquidity during the Chapter 11 cases to support its continuing business operations and minimize disruption. “We have conducted an extensive review of alternatives to address Avaya’s capital structure, and we believe pursuing a restructuring through chapter 11 is the best path forward at this time,” notes Kevin Kennedy, chief executive officer of Avaya. “Reducing the Company’s current debt through the chapter 11 process will best position all of Avaya’s businesses for future success.”
Avaya notes that, as part of its comprehensive assessment, the Company evaluated expressions of interest in various Company assets, including its Contact Center business. After evaluation in consultation with its financial and legal advisors, Avaya’s board determined that focusing on the Company’s debt structure is paramount and a sale of the Contact Center business at this time would not maximize value for customers and all of its stakeholders.
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