Word on the street is that the outfit owes quite a bit of dosh to its channel partners.
Avaya announced that it had started the Chapter 11 process and would be rebalancing its balance sheet, “to better position itself for the future”.
However there are a few channel names who will be caught up with the case because of the global size of the indirect partner base, which stands at 6,500 as of 30 September last year. More than 74 percent of product revenues in fiscal 2016 came from the channel.
Top if the pile is Avnet which is owed $8.8 million but also hit will be HPE, Salesforce, IBM, Infosys, World Wide Technology and Red Hat.
In a statement the vendor has promised that it will emerge from the current process stronger.
Kevin Kennedy CEO of Avaya insisted the company was performing well, the only problem is that the current capital structure is over 10 years old and was put in place to support its business model as a hardware-focused company.
Things have changed since then and Avaya is saddled with large debt obligations and the upcoming debt maturities. The company needs to be recapitalized, he said.
“Pursuing restructuring through chapter 11 will enable us to reduce Avaya’s debt and interest expense, while providing increased financial flexibility to further invest in innovation and growth to enhance our market-leading competitive position,” he added.
He is also confident he can minimise disruption to our customers, partners, and employees. He did not expect the company to generally experience any material disruptions during the chapter 11 process.