Avaya announced today that it has reached global consensus regarding the terms of its Chapter 11 plan with its major creditors. The company filed for Chapter 11 bankruptcy protection in January.
As a result of the global resolution, Avaya has filed a second amended plan of reorganization which, among other things, restructures its debt and redistributes stock and cash recovery options for creditors. Avaya expects to complete its restructuring and emerge from chapter 11 protection later this year.
Avaya projects to have $2.925 billion of funded debt and a $300 million senior secured asset-based lending (ABL) facility available upon emergence from bankruptcy, a substantial reduction from the approximately $6 billion of debt on its balance sheet. The debt restructuring will also provide Avaya with longer dated debt maturities and improve its ability to pursue future growth opportunities as it emerges as a public company.
"The global resolution is one of the most significant milestones in our chapter 11 process," said Jim Chirico, Avaya's president and CEO, in a statement. "It was our goal all along to reach a plan of reorganization that is fully supported by all of our major creditor groups. 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."