SUNNYVALE, Calif. – Mitel Networks Corporation, a provider of business communications, announced a strategic agreement with an ad hoc group of its senior lenders, certain junior lenders, and other key stakeholders to recapitalize its debt. This initiative aims to optimize Mitel’s global operations, enhance financial flexibility, and drive sustainable growth.
As part of this restructuring, Mitel’s balance sheet will be deleveraged by approximately $1.15 billion, significantly reducing its annual cash interest expense by approximately $135 million. The Company has secured $60 million in debtor-in-possession (DIP) financing and $64.5 million in exit financing, further supporting its operations and long-term strategy.
Tarun Loomba, Chief Executive Officer of Mitel, stated:
“For over 50 years, Mitel has pioneered and adapted to the ever-changing communications industry, shaping how organizations worldwide connect and communicate. We are confident the steps we are taking to optimize our capital structure will make us a stronger company primed for efficient and sustainable growth. Our strengthened capabilities at the end of this process will ensure we continue delivering secure, reliable communications solutions to our customers for years to come.”
Operational Continuity and Market Positioning
Mitel will continue to operate in the ordinary course throughout the restructuring process, ensuring uninterrupted service for its more than 70 million users across 100+ countries. The Company remains committed to supporting customers, partners, and vendors, with vendor payments expected to be made in full under normal terms.
The reorganization transaction will be implemented through a prepackaged plan of reorganization filed under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas. Mitel’s operations outside the U.S., Canada, and select business segments in the U.K. are not included in the Chapter 11 filing, and its global business will continue as usual.
Mitel has sought expedited court approval to maintain employee wages and benefits without disruption, ensuring stability throughout the restructuring. The Company is represented in this matter by Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal advisor, FTI Consulting, Inc. as financial advisor, and PJT Partners LP as investment banker. The Ad Hoc Group is advised by Davis Polk & Wardwell LLP and Perella Weinberg Partners LP.
