Avaya Could Hand Control to Lenders as Bankruptcy Looms – Reports

Creditors take charge of ailing vendor

Avaya considers handing control to lenders
Contact CentreAvayaLatest News

Last Edited: June 1, 2023

Tom Wright

Avaya is reportedly “in talks to hand control to lenders” as it continues battling financial pressures.

The vendor is facing Chapter 11 reorganization proceedings for the second time, as reported by UC Today late last year.

Bloomberg reports that people close to the negotiations have said bankruptcy could be filed by the end of January, with ongoing talks with investors Apollo Global Management, Ares Management, and Invesco.

The resulting financial security actions may ease investors’ concerns regarding Avaya’s recent troubled history.

In 2023, Avaya’s share price fell nearly 97 percent, bringing the company’s market cap down to about $45 million from $2 billion two years ago.

Avaya announced in September that impending job cuts would cost $26 million. On the other hand, the vendor anticipates significant savings, as stated in a filing with the SEC.

A Bumpy 2022

Avaya fired its CEO, Jim Chirico, in July last year, with Alan Masarek, a former boss at Vonage, taking his place.

The new boss said that a key task in the short and medium term is to simplify Avaya’s portfolio and clarify its proposition to existing and potential customers.

In doing so, the vendor pressed ahead with an “innovation without disruption” mantra, which it set out to CX Today last month.

Part of this plan is to scrap a number of products in its portfolio. However, it stopped short of revealing what these products are.

Indeed, a slide in a presentation deck for investors appears to reference this, blurring out 34 bullet points under the category “exit”.

Avaya product portfolio plan
The screenshot highlights how Avaya is set to cull elements of its portfolio.

Avaya determined this course of action after reporting a net loss of $1.408 billion at the beginning of August, predicting lower-than-expected Q3 sales of $575 million to $580 million in its results.

In Q4, this slipped further to $460-480MN – which, at best, represents a 36.8 percent YoY revenue slump.

Avaya is no stranger to bankruptcy, filing for Chapter 11 in 2017 before listing on the New York Stock Exchange.




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