Avaya enters into a Plan Support Agreement with holders of over 50% of its first lien debt

Vendor files Confirmable Amended Plan of reorganisation and disclosure statement with support of major stakeholders

Tags: Avaya Incorporation
  • E-Mail
Avaya enters into a Plan Support Agreement with holders of over 50% of its first lien debt Hani says this agreement provides a clear and viable path to exit Chapter 11 in line with Avaya's strategy.
By  Manda Banda Published  August 7, 2017

Seven months after Avaya Inc filed for Chapter 11 bankruptcy in the US, the vendor has revealed that it has entered into a Plan Support Agreement (PSA) with holders of over 50% of its first lien debt, including certain members of the Ad Hoc Group of First Lien Creditors.

In addition, the company has reached agreement with US Pension Benefit Guaranty Corporation (PBGC) to provide for the termination of the company's obligations under the Avaya Pension Plan for Salaried Employees (APPSE) and the related transfer of those obligations to PBGC, with the support of the Ad Hoc First Lien Group.

Avaya stated in a statement that it has filed an amended plan of reorganisation and disclosure statement reflecting the terms of these agreements.

As a result, once the company has received approval from the Court to solicit creditor votes and receives the requisite votes, the Amended Plan is confirmable. According to the company, key terms of the Amended Plan include: The reduction of Avaya's debt by more than $3bn from pre-filing levels; the settlement and transfer to PBGC of Avaya's obligations under the APPSE; Avaya's continued support of its obligations under the Avaya Pension Plan (APP); and initiation of steps to enable Avaya to emerge from chapter 11 as a public company.

"We are very pleased to have reached these agreements with these key stakeholders in our restructuring process, the Ad Hoc First Lien Group and PBGC," said Kevin Kennedy, president and chief executive officer, Avaya. "This is an important milestone in the Chapter 11 process and marks Avaya's progress toward our goal of emerging a stronger, more competitive company."

Kennedy added that: "We believe this is a positive and beneficial outcome for our stakeholders. With a creditor-supported and confirmable Plan of Reorganisation in place, we now have a clear and viable path to emerge from chapter 11 in the near term."

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code