Avaya Takes Key Step in Bankruptcy; India Biz Remains Strong
Avaya revealed a re-structured re-structuring plan and a new CEO. The company availed itself of Chapter 11 bankruptcy protection in January 2017, in order to re-finance debt it took on when going private back in 2007.
The company revealed a “plan of reorganization” that it said would mean “pre-filing debt will be reduced by more than US$4 billion” after “a debt-for-equity exchange, in which certain secured creditors would acquire 100 percent of reorganized Avaya’s equity”.
The company now said the plan’s been agreed by “holders of over 50% of its first lien debt”. The deal will reduce its debt by more than US$3bn. Also helping matters is a settlement of its underfunded pension plans, responsibility for which will be assumed by the U.S. Pension Benefit Guaranty Corporation in return for equity in Avaya and some cash.
While globally, there has been a turmoil, Avaya’s India business has progressed strongly. “This agreement provides a clear and viable path to exit Chapter 11 in line with our strategy. This is an important milestone as we work to emerge as a strong and competitive company in the coming weeks.” Vishal Agrawal, Managing Director, India and SAARC, said in a statement.
“Over the last two years, we have been vocal about the transformation of the India business; we recognised the need to restructure in order to align to the demands of the Indian market and deliver software and services that local organisations need and ensure the success of our customers,” he added.
Agrawal said that the transformation is proving positive, and last year the company’s India operations closed its fiscal 2016 at a good quarter.”The business has continued to build from there. I am pleased to note this progress has continued, with the local business to date. We take great pride with the level of confidence and support that we continue seeing from our customers and partners in India,” he added.
Avaya is betting big on the software developer community in the country to demonstrate its commitment towards the Digital India initiative, he said adding that the company intends to use India as their big incubation centers to encourage young developers build next generation business applications on its platform and help organizations serve their customers in an efficient way in this digital era.
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