Avaya entered into a plan support agreement (PSA) with holders of more than 50% of its first lien debt, including certain members of the ad hoc group of first lien creditors.
According to a related 8-K filing, Citicorp served as agent for the first lien creditors in the company’s ABL Intercreditor Agreement. The Bank of New York Mellon was agent for Avaya’s First Lien Intercreditor Agreement. In January, Citibank provided $725 million DIP financing for Avaya.
The PSA results from extensive negotiations among Avaya and members of the ad hoc first lien group. The holder parties (as defined in the PSA) who executed the PSA collectively hold over 50% of Avaya’s first lien indebtedness. These parties have agreed, among other things, to support the restructuring transactions contemplated by the amended plan, vote in favor of the amended plan when solicited in accordance with applicable law and not take any action inconsistent with the PSA or the transactions contemplated thereby. As a result, once the company has received approval from the court to solicit creditor votes and receives the requisite votes, the amended plan is confirmable.
Key terms include:
- The reduction of Avaya’s debt by more than $3 billion from pre-filing levels
- Avaya’s continued support of its obligations under the Avaya pension plan
- Initiation of steps to enable Avaya to emerge from Chapter 11 as a public company.
“We are very pleased to have reached these agreements with these key stakeholders in our restructuring process, the Ad Hoc First Lien Group and PBGC,” said Kevin Kennedy, president and CEO of Avaya. “This is an important milestone in the chapter 11 process and marks Avaya’s progress toward our goal of emerging a stronger, more competitive company. Further, we believe this is a positive and beneficial outcome for our stakeholders. With a creditor-supported and confirmable Plan of Reorganization in place, we now have a clear and viable path to emerge from chapter 11 in the near term.”
Centerview Partners and Zolfo Cooper Management are Avaya’s financial and restructuring advisors, and Kirkland & Ellis is the company’s restructuring counsel.
The Ad Hoc First Lien Group is represented by Akin Gump Strauss Hauer & Feld, and PJT Partners, as legal and financial advisors, respectively.
Avaya provides software and services for contact center and unified communications— offered on premises, in the cloud, or a hybrid.
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