https://www.channelfutures.com/wp-content/themes/channelfutures_child/assets/images/logo/footer-new-logo.png
  • Home
  • Technologies
    • Back
    • SDN/SD-WAN
    • Cloud
    • RMM/PSA
    • Security
    • Telephony/UC/Collaboration
    • Cable
    • Mobility & Wireless
    • Fiber/Ethernet
    • Data Centers
    • Backup & Disaster Recovery
    • IoT
    • Desktop
    • Artificial Intelligence
    • Analytics
  • Strategy
    • Back
    • Mergers and Acquisitions
    • Channel Research
    • Business Models
    • Distribution
    • Technology Solutions Brokerages
    • Sales & Marketing
    • Best Practices
    • Vertical Markets
    • Regulation & Compliance
  • MSP 501
    • Back
    • 2022 MSP 501 Rankings
    • 2022 NextGen 101 Rankings
  • Intelligence
    • Back
    • Galleries
    • Podcasts
    • From the Industry
    • Reports/Digital Issues
    • Webinars
    • White Papers
  • Channel Futures TV
  • EMEA
  • Channel Chatter
    • Back
    • People on the Move
    • New/Changing Channel Programs
    • New Products & Services
    • Industry Honors
  • Resources
    • Back
    • Advisory Boards
    • Industry Organizations
    • Our Sponsors
    • Advertise
    • 2023 Editorial Calendar
  • Awards
    • Back
    • 2022 MSP 501
    • Channel Influencers
    • Circle of Excellence
    • DE&I 101
    • Technology Advisor 101 (TA 101)
  • Events
    • Back
    • 2023 Call for Speakers
    • CP Conference & Expo
    • MSP Summit
    • Channel Partners Europe
    • Channel Partners Event Coverage
    • Webinars
    • Industry Events
  • About Us
  • DE&I
Channel Futures
  • NEWSLETTER
  • Home
  • Technologies
    • Back
    • SDN/SD-WAN
    • Cloud
    • RMM/PSA
    • Security
    • Telephony/UC/Collaboration
    • Cable
    • Mobility & Wireless
    • Fiber/Ethernet
    • Data Centers
    • Backup & Disaster Recovery
    • IoT
    • Desktop
    • Artificial Intelligence
    • Analytics
  • Strategy
    • Back
    • Mergers and Acquisitions
    • Channel Research
    • Business Models
    • Distribution
    • Technology Solutions Brokerages
    • Sales & Marketing
    • Best Practices
    • Vertical Markets
    • Regulation & Compliance
  • MSP 501
    • Back
    • 2022 MSP 501 Rankings
    • 2022 NextGen 101 Rankings
  • Intelligence
    • Back
    • Galleries
    • Podcasts
    • From the Industry
    • Reports/Digital Issues
    • Webinars
    • White Papers
  • Channel Futures TV
  • EMEA
  • Channel Chatter
    • Back
    • People on the Move
    • New/Changing Channel Programs
    • New Products & Services
    • Industry Honors
  • Resources
    • Back
    • Advisory Boards
    • Industry Organizations
    • Our Sponsors
    • Advertise
    • 2023 Editorial Calendar
  • Awards
    • Back
    • 2022 MSP 501
    • Channel Influencers
    • Circle of Excellence
    • DE&I 101
    • Technology Advisor 101 (TA 101)
  • Events
    • Back
    • 2023 Call for Speakers
    • CP Conference & Expo
    • MSP Summit
    • Channel Partners Europe
    • Channel Partners Event Coverage
    • Webinars
    • Industry Events
  • About Us
  • DE&I
    • Newsletter
  • REGISTER
  • MSPs
  • VARs / SIs
  • Agents
  • Cloud Service Providers
  • Channel Partners Events
 Channel Futures

Mergers and Acquisitions


Avaya Said to Meet Creditors as It Wrangles $6 Billion Debt

  • Written by Chris
  • June 10, 2016
Avaya's creditors are pushing for the company to halve its debt load, which includes a $616 million term loan that’s coming due next year.

Avaya Inc. will meet with creditors this week for the first time since the company  said it’s reviewing ways to rein in its $6 billion debt load, according to people with knowledge of the matter.

The discussions will put the software and services provider face-to-face with a group of lenders including Blackstone Group LP and Apollo Global Management LLC, who hired advisers to negotiate with the company, said the people, who asked not to be identified because the discussions are private. The creditors are pushing for the company, which private-equity firms TPG Capital Management and Silver Lake Management acquired in 2007, to halve its debt load, one of the people said.

With dwindling revenue and pressure from cloud-based upstarts and networking giant Cisco Systems Inc., Avaya will likely struggle to repay a $616 million term loan that’s coming due next year, Moody’s Investors Service said earlier this year. Avaya said last month that it hired Goldman Sachs Group Inc. and Centerview Partners to assess options to bolster its balance sheet, including asset sales.

If the company doesn’t raise enough cash through asset sales to significantly boost its liquidity, lenders would likely push for other options including a debt-for-equity swap that could cut its debt load, one of the people said.

Blackstone’s credit arm GSO Capital Partners leads the creditor group, which holds a total of $4.67 billion of Avaya’s first-lien loans and bonds, said the people. Apollo Global Management LLC, Davidson Kempner Capital Management and Guggenheim Partners are among other large holders in the group, which is being advised by PJT Partners Inc. and Akin Gump Strauss Hauer & Feld, the people said.

A second creditor group led by Franklin Resources Inc., which holds Avaya’s $1.38 billion of second-lien bonds maturing 2021, hired Rothschild & Co. and Stroock & Stroock & Lavan as advisers, a person said.

Moody’s cut Avaya’s corporate rating to Caa1 from B3 in February with a negative outlook, citing “continued declines in performance as well as concerns about the sustainability of the current capital structure.” In particular, Moody’s questioned Avaya’s ability to refinance its debt that comes due in 2017 and 2018.

“While the company could likely limp along if all maturities were pushed out to 2020, the current capital structure is impractical and at worst, prevents some customers from choosing Avaya,” Moody’s wrote.

S&P Global Ratings downgraded the company to CCC from B- in April.

Avaya has transitioned away from telecommunications to software and services, which generated 75 percent of its second quarter revenue, a separate person with knowledge of the matter said.

Representatives for TPG, Silver Lake, Blackstone, Davidson Kempner, Goldman Sachs, PJT and Rothschild declined to comment. Representatives for Avaya, Apollo, Guggenheim, Akin Gump, Franklin, Stroock & Stroock, and Centerview didn’t immediately respond to requests for comment.

Avaya’s $1 billion of 7 percent first-lien notes maturing April 2019 last traded at 73.50 cents on the dollar at 10:54 a.m. Wednesday in New York and have lost 25 percent in value in the past 12 months, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The company’s $1.38 billion of 10.5 percent second-lien bonds maturing in 2021 last traded at 28.5 cents on the dollar on June 6 and have lost more than 60 percent in value over the past 12 months, Trace records show.

Tags: MSPs Mergers and Acquisitions

Most Recent


  • Mergers and Acquisitions, MA
    Mitel to Acquire Atos’ Unify, ‘Catalyzing’ Greater Modernization of Communications Solutions
    The deal would mean the companies would have collective customer base of more than 75 million users in over 100 countries.
  • Chasing money, catching money
    Elliott Management Buys Stake in Salesforce to Help 'Realize the Value'
    Elliott has pushed for divestments and cost reductions at portfolio companies like EMC, Juniper Networks and ATT.
  • money
    Spectrotel Acquired by Grain Management, Eyes Mobility Expansion
    Spectrotel will speed up the expansion of its mobile device management (MDM) services as a result of the deal.
  • Taking online course
    CompTIA Acquisition Will Accelerate Training, Certification Offerings
    The move enables CompTIA to help expand opportunity and diversity in the tech workforce.

Leave a comment Cancel reply

-or-

Log in with your Channel Futures account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • Coffee with Craig and James w/Craig Weir, Ingram Micro
    Coffee with Craig and James Episode No. 95: Ingram Micro, MSP 501
  • accelerate
    MSP, Agent M&A Skyrocket as Microsoft, Dell Make Deals
  • Sign post with option A and option B
    Aruba Delays Silver Peak Channel Integration, Emphasizes Partner Choice
  • Security Vulnerability
    Cisco Buying Kenna Security for Vulnerability Management

Upcoming Events

View all

Channel Partners Conference & Expo

May 1, 2023 - May 4, 2023

Channel Partners Europe

June 13, 2023 - June 14, 2023

Channel Futures Leadership Summit

October 30, 2023 - November 2, 2023

Galleries

View all

Intelisys, Suppliers, Agents Take Aim at the Partner Marketing Gap

January 26, 2023

Ivanti: Everyone Should be Concerned About ChatGPT and Cybersecurity

January 25, 2023

Microsoft Earnings: Azure, Other Cloud Services Contribute 31% Growth

January 24, 2023

Industry Perspectives

View all

Make the Most of the Gift of Time in 2023

January 25, 2023

Strong Partnerships Ease Challenging UPS Upgrade

January 24, 2023

The Advantages of Managed Networking and Security During Economic Uncertainty

January 5, 2023

Webinars

View all

Next-Generation MSP Platform: The Building Blocks for Your Business

February 15, 2023

Security Secrets of the MSP 501: How to Be a Cyber Leader in 2023

December 15, 2022
  • 1

Cybersecurity Certifications: Their Evolving Role in the Fight Against Increasing Attacks

December 13, 2022

White Papers

View all

Overcoming Your Endpoint Security Limitations with a Skeleton Crew

October 25, 2022

Embracing the Zero Trust Mindset For Endpoints

October 24, 2022

Endpoints are the Destination

October 24, 2022

Channel Futures TV

View all

Coffee with Craig and James Episode 117: Cato Networks, Video Killed the Podcast Stars

Retired Astronaut Capt. Scott Kelly Previews His CP Expo Keynote

December 21, 2022

Fusion Connect Eyes Future with Intrado UC, Managed Network Customers

September 23, 2022

RingCentral Focused on Hybrid Work, Microsoft Teams, Other Integrations

September 23, 2022

Twitter

ChannelFutures

.@msftsecurity surpasses $20 billion in annual revenue, analysts say it's a formidable #cybersecurity market conten… twitter.com/i/web/status/1…

January 26, 2023
ChannelFutures

The adoption of cloud-based services ☁️ has spiked in the last few years and is among the top growth segments. See… twitter.com/i/web/status/1…

January 26, 2023
ChannelFutures

[email protected], @NICECXone, @lumencpp, @CiscoPartners joined @IntelisysCorp and partners for a day of marketing worksho… twitter.com/i/web/status/1…

January 26, 2023
ChannelFutures

.@IBM and @SAP announce #layoffs of thousands of employees dlvr.it/ShV2VY https://t.co/7QK1YqVpwa

January 26, 2023
ChannelFutures

#MSPs can boost #Channel business if they personalize the #DigitalExperience for partners, says @AvePoint.… twitter.com/i/web/status/1…

January 26, 2023
ChannelFutures

Consider mental health in the context of DE&I. Create safe spaces where employees can feel comfortable being who th… twitter.com/i/web/status/1…

January 26, 2023
ChannelFutures

.@GoIvanti's CSO says #ChatGPT poses numerous cybersecurity concerns. dlvr.it/ShRmdt https://t.co/n22RZ4PZaO

January 25, 2023
ChannelFutures

.@ConnectWise losing Craig Fulton after 16 years. #MSPs dlvr.it/ShRRxg https://t.co/KaAVH8gRYs

January 25, 2023

MSP 501

The industry's largest and most comprehensive partner awards program.

Newsletters and Updates

Sign up for The Channel Report, Channel Futures Update, MSP 501 Newsletter and more.

Live Channel Events

Get the latest information on the next industry-leading Channel Partners event.

Galleries

Educational slide shows and images from live events.

Media Kit And Advertising

Want to reach our audience? Access our media kit.

DISCOVER MORE FROM INFORMA TECH

  • Channel Partners Events
  • Telecoms.com
  • MSP 501
  • Black Hat
  • IoT World Today
  • Omdia

WORKING WITH US

  • Contact
  • About Us
  • Advertise
  • Newsletter

FOLLOW Channel Futures ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookie Policy
  • Terms
Copyright © 2023 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X