February 2023 //
This week, after months of speculation, Avaya announced its financial restructuring plans. The company has entered into a restructuring support agreement (RSA) with an “overwhelming majority” of the company’s lenders. Once the restructuring is complete, Avaya’s total debt will be reduced by 75%, to $800 million from $3.4 billion. It will also increase the company’s cash on hand to roughly $600 million, providing substantial liquidity for Avaya moving forward. Because Avaya has already obtained agreement among more than 90% of its secured creditors, the restructuring is expected to be completed in only two to three months. This will result in Avaya having net debt leverage of less than 1x, and this capital structure will give Avaya a competitive advantage among its peers.