Unified communications vendor Avaya has finally emerged from Chapter 11 protection from bankruptcy in the US with completion of its debt reconstruction plan.
The exit from bankruptcy protection follows Avaya’s move into chapter 11 in January this year with almost US$6 billion in debt and plans to reduce that debt to US$2.9 billion.
Avaya had said it expected to emerge from the restructuring of its business by the end of this year after the United States Bankruptcy Court for the Southern District of New York confirmed its reorganisation plan.
And in August, Avaya revealed a dip in revenue of US$1 million down to US$803 million for the third fiscal quarter which ended on 30 June compared to the prior quarter.
{loadposition peter}At that time, revenue year-over-year was down US$79 million which the company attributed to lower demand for products and services, primarily due to extended procurement cycles resulting from its chapter 11 bankruptcy protection filing.
Announcing the exit from chapter 11, Jim Chirico, Avaya’s president and CEO said, “This is the beginning of an important new chapter for Avaya. In less than a year since the commencement of our chapter 11 restructuring, Avaya has emerged as a publicly traded company with a significantly strengthened balance sheet.
“Overall, we reduced our prior debt load by approximately $3 billion, and we exit today with more than $300 million in cash on our balance sheet. The reduction of our debt and certain other long-term obligations will also improve annual cash flow by approximately $300 million compared to fiscal 2016.
“We have the flexibility we need to invest in the large and growing contact centre and unified communications markets as we complete our transformation to a software, services and cloud solutions provider,” Chirico added. “With a new Board and leadership team firmly in place, Avaya is now well-positioned to execute on its growth plan and deliver the returns and value expected by our stakeholders.”
Chirico says Avaya is taking the steps necessary to list on the New York Stock Exchange and expects to have approximately 110 million shares outstanding on emergence.