Avaya will soon exit Chapter 11 Bankruptcy, with Judge David R. Jones stating that he will approve its plan.
Once initiated, the plan will wipe $2.6BN of its debt, which stood at $3.4BN before the filing.
The remaining $800M is due in 2028, with the agreement freeing up over $650M in liquidity for Avaya to invest in its solutions and services.
Avaya may do so after it officially leaves Chapter 11 protection, which it intends to do in the coming weeks – according to a lawyer representing the vendor.
The move shouldn’t impact the support and services Avaya offers its customers and partners.
Upon the announcement, Alan Masarek, CEO at Avaya, stated:
We embarked on this process with a clear goal – to create a stronger financial foundation that enables us to build on our competitive industry position, strengthen our partner ecosystem and better meet the needs of our customers with further investment in our cutting-edge, long-range product roadmaps.
Unfortunately, Avaya has been here before, filing for bankruptcy in 2017. As such, many will question its long-term viability.
However, Avaya will avoid much of the scrutiny it has endured in recent years when it exits bankruptcy, as it will become a private company.
Masarek also aims to shift the focus towards its innovation roadmap – as Avaya shared with CX Today in December – which he hopes will differentiate its offerings.
"With considerable resources to execute on our R&D initiatives and cloud communications roadmap, we intend to accelerate the delivery of exceptional experiences to our customers and partners," added Masarek.
The CEO also took the opportunity to thank the 90 percent of Avaya’s lenders that backed its restructuring agreement.
These will receive a percentage stake in the business relative to the debt they held.