Avaya Plans Capital Structure Changes and Contact Center Sale

Avaya Inc., telecommunication, networking, contact center and video collaboration company, is considering filing for chapter 11 bankruptcy.  It is also considering selling its contact center business.  

(By: Matt Jarzemsky) http://www.wsj.com/articles/avaya-weighing-bankruptcy-filing-sale-of-call-center-software-unit-1479941695

Private Equity owners, Silver Lake and TPG could reach a decision on the matter as early as next month.  The Private Equity firms purchased the company in 2007.  The filing would proceed after the sale of Avaya's contact center business. 

Analysts estimate the value of Avaya's contact center business at $4 billion.  Clayton Dubilier & Rice LLC is a potential buyer for the unit.

Proceeds from the sale of the company's contact center business could be used to pay the company's senior debt.  Creditors could also trade debt for ownership in a reorganized company.  Avaya owes long-term creditors $6 billion. 

Avaya's creditors include Blackstone Group LP's credit arm and Franklin Resources Inc.  These companies are expected to negotiate a restructuring plan with Avaya in the coming weeks.  

Silver Lake and TPG bought the company for around $8 billion in 2007. 

Avaya's Private Equity firms planned to take the company public in 2011, but chose not to move forward with the offering.  

Avaya hired Goldman Sachs Group Inc. and Centerview Partners in May 2016 to plan capital structure changes including a sale or transaction.

(By: Matt Jarzemsky) http://www.wsj.com/articles/avaya-weighing-bankruptcy-filing-sale-of-call-center-software-unit-1479941695 

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