Networking and unified communications equipment supplier Avaya, along with a number of subsidiaries, has declared chapter 11 bankruptcy in the US in order to buy itself time to restructure its balance sheet, but says its foreign affiliates will not be affected and will be able to continue operating normally.
Avaya, formerly part of Lucent Technologies and, at one time, US telco AT&T, is understood to have been weighing up various options for its future ever since it emerged that its VC owners were considering selling it last year.
It has now obtained a $725m debtor-in-possession (DIP) financing facility, underwritten by Citibank, which, together with its cash from operations, should give it enough leeway to support the business while it remains under chapter 11 protection.
“We have conducted an extensive review of alternatives to address Avaya’s capital structure, and we believe pursuing a restructuring through chapter 11 is the best path forward at this time,” said CEO Kevin Kennedy.
