Avaya's Chapter 11 Announcement - What Does This Mean?

On the 19th January 2017, Avaya announced that they had made the decision to file for Chapter 11, bankruptcy protection. There has been much talk around what this might mean for the company, its partners and end-users, however, as a partner of Avaya we would like to provide some clarity on the situation.

What does this mean?

Chapter 11 is not an uncommon action in the US. Avaya petitioned for a voluntary petition to restructure its debts after assessing a wide range of alternatives to address its capital structure and improve its balance sheet, thus avoiding bankruptcy. This action only affects Avaya Inc in the US, the company’s foreign affiliates are not affected by this filing. Avaya is working to ensure a smooth transition for its US based offices and has filed a number of customary “first-day” motions with the Court to minimize business disruption.

Why has Avaya filed for Chapter 11?

Avaya needs to address its historic debt and interest expense but, as reflected in its 2016 financial results, Avaya is healthy and performing well. They report total revenue for the fourth quarter as $958 million and adjusted EBITDA of $940 million for the 2016 fiscal year (Source: Avaya Report Fourth Quarter and Fiscal Year 2016 Financial Results, January 2017). Avaya continue to develop innovative products and have confirmed that they have no plans to discontinue any of their existing services.

What does this mean for you?

Avaya control a significant space within the telecoms industry and continue to develop innovative solutions that form part of ITRM’s Voice and Data products and services portfolio. ITRM has a strong partnership with Avaya and they continue to be a telephony partner of choice. Products and services in place will not be affected by the action taken by Avaya and you will see no impact in the way that we sell and support them. Avaya will join ITRM’s event; Creating Business Agility with Hybrid Cloud, on the 26th April 2017 to discuss their cloud telephony services, all of which we are actively promoting to our clients. For more information on this event see http://bit.ly/2kP4ZTd