Avaya, which is going through a financial restructuring to come out of the current turbulent times, today said it is aiming to emerge from Chapter 11 in fall 2017.
Avaya announced plan support agreement with holders of over 50 percent of its first lien debt, including certain members of the Ad Hoc Group of First Lien Creditors.
Avaya also filed confirmable amended plan of reorganization and disclosure statement with support of major stakeholders.
In addition, the company has reached agreement with U.S. Pension Benefit Guaranty Corporation (PBGC) to provide for the termination of the company’s obligations under the Avaya Pension Plan for Salaried Employees (APPSE) and the related transfer of those obligations to PBGC, with the support of the Ad Hoc First Lien Group.
These parties agreed, among other things, to support the restructuring transactions contemplated by the Amended Plan, vote in favor of the Amended Plan when solicited in accordance with applicable law and not take any action inconsistent with the PSA or the transactions contemplated thereby.
As a result, once the company has received approval from the Court to solicit creditor votes and receives the requisite votes, the Amended Plan is confirmable.
Key terms of the Amended Plan include:
# Reduction of Avaya’s debt by more than $3 billion from pre-filing levels
# Settlement and transfer to PBGC of Avaya’s obligations under the APPSE
# Avaya’s support of its obligations under the Avaya Pension Plan
# Steps to enable Avaya to emerge from chapter 11 as a public company
Kevin Kennedy, president and chief executive officer of Avaya, said: “This is an important milestone in the chapter 11 process and marks Avaya’s progress toward our goal of emerging a stronger, more competitive company.”
“With a creditor-supported and confirmable Plan of Reorganization in place, we now have a clear and viable path to emerge from chapter 11 in the near term,” Kevin Kennedy said.
Avaya also appointed Jim Chirico as CEO, effective October 1.
“We recognized the need to restructure in order to align to the demands of the Indian market and deliver software and services that local organizations need and ensure the success of customers,” said Vishal Agrawal, managing director, India and SAARC, Avaya India.
“The transformation is proving positive – last year we reported that Avaya India closed its fiscal 2016 at a good quarter, and the business has continued to build from there,” Vishal Agrawal said.