Apparently this is all due to a Plan Support Agreement (PSA) with holders of more than 50 percent of its first lien – or highest priority – debt.
Kennedy said the new plan is the result of “extensive negotiations” among Avaya and members of its “Ad Hoc First Lien Group”.
The creditors have agreed to support Avaya’s amended plan – which includes wiping more than $3 billion from Avaya’s debts, and transferring pension plan obligations under the Avaya Pension Plan for Salaried Employees (APPSE) to the US Pension Benefit Guaranty Corporation (PBGC).
The amended plan also pledges to take steps to enable Avaya to emerge from the Chapter 11 process as a public company. It still needs to be cleared by the Court which is likely to happen on 23 August.
Along with the debt holder agreement, Avaya announced that Kennedy is stepping down from the CEO post to be replaced by chief operating officer Jim Chirico as of 1 October. Kennedy will also retire from the board of directors, but will remain an advisor to the firm.
Avaya’s bankruptcy process hit shedloads of resellers and distributors. Avnet was named the firm’s second biggest unsecured creditor, with Avaya owing the distribution giant $8.8 million in unsecured debt.
Other large creditors include big reseller partners such as World Wide Technology which was owed $1.6 million and SHI
Avaya has also today filed its preliminary third quarter 2017 financial results, which expects revenues to fall nine percent year over year to around $802 million to $804 million, while EBITDA is forecast to come in at $202 million to $206 million down from $223 million reported in Q3 of 2016.