Avaya plans to emerge from bankruptcy as a public company
Unified communications specialist readies to enter the next chapter with renewed strengths and a new capital structure
Unified communications specialist Avaya has said it's readying to exit Chapter 11 Bankruptcy Protection later this year and emerge as a public traded company.
The move comes as Avaya's scheduled court hearing to have the reorganisation plan approved got the courts authorisation paving the way for the company to commence the voting process.
John Sullivan, CFA, VP and corporate treasurer, Avaya Inc, said the court hearing in August 2017 went very well and Avaya got everything it was hoping for. "The court approved our disclosure statement which allows us to commence the voting process. We can now begin to source some votes to have our plan of reorganisation approved," he said.
"We are fortunate to operate in a legal system that allows companies to restructure their balance sheets and continue to operate as healthy businesses, providing jobs, technology innovation and value to customers."
According Sullivan, the voting deadline is October 27th 2017 and that gives Avaya enough time to collect the votes. "This process will then be followed by a confirmation hearing on November 15th 2017, where we are hoping then that the court approves the plan of reorganisation, which will allow us to exit Chapter 11," he added. "I would say this will be within two to three weeks after the plan is approved and that will probably be end of November or early December."
As Avaya prepares to enter the next chapter with renewed strengths and a new capital structure, partners are closely watching what the company will have up its sleeves once it becomes a public traded company.
Sullivan said it actually has a lot of very positive benefits to being a public company. "First of all, there is a lot more visibility and you get more press because people will be following your stock and talking about your stock," he said. "We always filed our financial statements even when we were a private company and there is no difference there and even when we did our earnings call with analysts."
He explained that the most important thing is that Avaya will have access to additional capital and as a public traded company, that cash can help sponsor the company's growth.
A Dubai-based solution provider and Avaya partner that spoke to Channel Middle East on condition of anonymity, said he has high hopes with the vendor's plans to emerge from Chapter 11 Bankruptcy as a public company and the new leadership role that will take over following the retirement of Kevin Kennedy as CEO and board member role from October 1st, 2017.
Avaya has transitioned from a hardware vendor to a software and service company set to provide the next generation offerings in the unified communications and contact centre space.
Sullivan said when Avaya sold the networking business that was actually very significant because in Q3 the company was 79% software and services. "The sale of the networking business pushes us up a few points just above 80% and within a year or two, we should be at 90% as a software and services company," he declared. "We are continuing to develop and release new products and those products are now primarily software offering that will continue the advancement of the business model."
He reiterated that partners are a very important part of the Avaya business model. "There are responsible for 80% of our product revenue, which goes through partners so they are very important and integral to our business model," he said. "We wouldn't be able to have the amount of reach with customers globally without our partners so they will always be important to us and will do everything we can to make them succeed in the market as we believe it's a win-win scenario," he said.
In 2007, Avaya was acquired by the private equity firms TPG Capital and Silver Lake Partners for $8.2bn. Avaya said it had taken the initial steps to enable the company to emerge from Chapter 11 as a public company.