Summary - are months behind in paying our bills and we owe you thousands, but we have delayed so long that the law now says we do not have to pay you.
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Dear Avaya Supplier:
Today we announced that we have taken action to restructure our balance sheet and better position the Company for the future. To facilitate this restructuring, Avaya Inc. (together with certain of its domestic subsidiaries, collectively, the “Company”) filed voluntary petitions under chapter 11 of the U.S. Bankruptcy Code. The Company’s foreign affiliates are not included in the filing and will continue normal operations. You may have already seen a number of media reports, but I wanted to put this news in context, explain why this is the best path forward for Avaya and what it means for you.
First and most importantly, Avaya is fully focused on the future. We are operating our business as usual, and remain fully committed to providing the same innovative products and industry-leading services our customers have come to expect from us. At this time, we are not discontinuing any products or services. After the chapter 11 filing, we will continue to meet the commitments we have made to our customers, partners and employees in the ordinary course of business, subject to Bankruptcy Court approval, as necessary. In addition, we are seeking Bankruptcy Court approval of $725 million in debtor-in-possession financing which, if approved, will provide the Company with additional liquidity to fund operations throughout the chapter 11 cases.
With respect to our ongoing business relationship, the Bankruptcy Code provides administrative priority status for goods and services received after the chapter 11 filing date, and you should be assured that we fully intend to meet our post-petition obligations in the ordinary course of business.
As you know, we have made an effort to remain current with our suppliers. However, for goods and services received prior to the filing date, the Bankruptcy Code does not permit payment at this time.
Now let me tell you why we took this action. We have been working very hard to evaluate options to address Avaya’s capital structure. While our business is healthy and performing well, our current capital structure is nearly 10 years old, put in place to support our business model as a hardware-focused company, which has evolved significantly since that time. This restructuring is a critical step in our ongoing transformation to a successful software and services business. Now, as a result of the terms of Avaya’s debt obligations and the upcoming debt maturities, the Company is in need of recapitalization.
While we remain in ongoing negotiations with potential buyers to monetize certain assets, we have decided that implementing a restructuring through a formal chapter 11 is the best path for the Company at this time. We believe it will allow us to significantly deleverage our balance sheet and emerge a healthier company with financial flexibility to invest in innovation and growth, and create better products that better address our customers’ needs. Deleveraging Avaya’s balance sheet will help position the Company for long-term success, and we are confident that we can emerge from this process stronger than ever.
While it is difficult at this point to project a timeframe for emerging from chapter 11, we are committed to making this a transparent process and will make every effort to keep you informed. If you have any questions, or would like more information about the chapter 11 case, including access to Court documents, please visit https://cases.primeclerk.com/avaya or call the information line at:
Toll Free (USA and Canada): 855-252-2156
International Callers: 917-651-0441
You should also know that after extensive evaluation in consultation with our financial and legal advisors, our Board of Directors has determined that focusing on the Company’s debt structure is paramount and a sale of the Contact Center business at this time would not maximize value for suppliers and all of Avaya’s stakeholders.
We value our relationship with you, and expect to remain a valued partner of yours for many years to come. Thank you for your loyalty and patience as we go through this process.
Sincerely,
Kevin Kennedy
Chief Executive Officer