Avaya files for Chapter 11 in Bankruptcy Court
Avaya announced today, Feb 14, 2023, that it is filing for Chapter 11. They have created a website for the sole purpose of disseminating information regarding this process; see link here.
Published highlights appear to include:
- Elimination of more than 75% of their debt
- With support of the financial stakeholders the process is expected to complete within 60 to 90 days
- Avaya claims to have received commitments for approximately $780 million in new financing from certain existing lenders and a bank syndicate
- Vendors and suppliers will be paid in full, regardless of when goods or services were delivered
- They have extended and expanded their global, strategic partnership with RingCentral, Inc.
- It is not expected shareholders will receive any recovery at the end of the court supervised process
- The company will exit this process as a privately held company instead of a publicly traded one
Avaya’s Previous Chapter 11 Filing
If this sounds like deja vu, it’s because Avaya performed a similar Chapter 11 process at a similar time of year back in 2017! Here is their post about it.
What does this mean about the health of business telecom providers going forward? Tough to say, although financial woes seem to plague many telecom vendors these days. Companies like Ring Central and 8×8 post large losses. Toshiba and Panasonic have or are exiting the industry. Some local dealers and Value Added Resellers have trouble keeping the doors open – Digitcom in Canada being a case in point. Clearly the landscape is changing but it remains to be seen what form it will take.
