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Avaya files for chapter 11 4
- Thread starter SherWat
- Start date
Avaya files for Chapter 11 bankruptcy, won't sell contact center assets
Avaya has $6 billion in debt maturing within a year and said that its balance sheet was hampering its transformation to become more software and services based.
Avaya said it has filed to restructure in Chapter 11 bankruptcy protection, obtained debtor-in-possession financing, and decided it won't sell off its various assets such as its contact center unit.
In a statement, Avaya noted that its foreign affiliates aren't included in the filing and will operate as normal.
Avaya said the $725 million in debtor-in-possession financing, via Citibank, is enough to minimize disruption and continue business operations. Avaya's products cover communication and messaging, video conferencing, call center, networking, and software and services.
The company said the bankruptcy restructuring will give it leeway to change its debt structure. Selling off units such as its Contact Center business would hurt its efforts to restructure debt.
CEO Kevin Kennedy said:
This is a critical step in our ongoing transformation to a successful software and services business. Avaya's current capital structure is over 10 years old and was put in place to support our business model as a hardware-focused company, which has evolved significantly since that time. Now, as a result of the terms of Avaya's debt obligations and the upcoming debt maturities, we need to recapitalize the company.
Separately, Avaya reported its fourth quarter and 2016 results. The company posted a net loss of $505 million on revenue of $958 million, down from $1 billion a year ago. For the fiscal year ending September 30, Avaya reported a net loss of $750 million on revenue of $3.7 billion. Avaya has $6 billion in debt maturing within a year.
Avaya was a spin off of Lucent Technologies in 2000 and became a private company in 2007 via a deal with Silver Lake and TPG Capital valued at $8.2 billion. In 2009, Avaya acquired Nortel Enterprise Solutions to expand into networking.
Avaya has $6 billion in debt maturing within a year and said that its balance sheet was hampering its transformation to become more software and services based.
Avaya said it has filed to restructure in Chapter 11 bankruptcy protection, obtained debtor-in-possession financing, and decided it won't sell off its various assets such as its contact center unit.
In a statement, Avaya noted that its foreign affiliates aren't included in the filing and will operate as normal.
Avaya said the $725 million in debtor-in-possession financing, via Citibank, is enough to minimize disruption and continue business operations. Avaya's products cover communication and messaging, video conferencing, call center, networking, and software and services.
The company said the bankruptcy restructuring will give it leeway to change its debt structure. Selling off units such as its Contact Center business would hurt its efforts to restructure debt.
CEO Kevin Kennedy said:
This is a critical step in our ongoing transformation to a successful software and services business. Avaya's current capital structure is over 10 years old and was put in place to support our business model as a hardware-focused company, which has evolved significantly since that time. Now, as a result of the terms of Avaya's debt obligations and the upcoming debt maturities, we need to recapitalize the company.
Separately, Avaya reported its fourth quarter and 2016 results. The company posted a net loss of $505 million on revenue of $958 million, down from $1 billion a year ago. For the fiscal year ending September 30, Avaya reported a net loss of $750 million on revenue of $3.7 billion. Avaya has $6 billion in debt maturing within a year.
Avaya was a spin off of Lucent Technologies in 2000 and became a private company in 2007 via a deal with Silver Lake and TPG Capital valued at $8.2 billion. In 2009, Avaya acquired Nortel Enterprise Solutions to expand into networking.
I guess all good things must come to an end, including my beloved desk telephone and Avaya and anything remotely resembling Nortel legacy.
I got in an argument this past weekend with my best friend from college when talking about deskphones. He went on and on about why can't you just use a cell phone, who needs deskphones anymore.
Then my fiance gave me the same argument. She said deskphones are done, no reason to use one, because cell phones have taken over.
I personally disagree and think deskphones will be around in one form or another for years....but Avaya going broke is making me think different.
Joseph Sus Jr. Nortel Emetrotel Consultant
I got in an argument this past weekend with my best friend from college when talking about deskphones. He went on and on about why can't you just use a cell phone, who needs deskphones anymore.
Then my fiance gave me the same argument. She said deskphones are done, no reason to use one, because cell phones have taken over.
I personally disagree and think deskphones will be around in one form or another for years....but Avaya going broke is making me think different.
Joseph Sus Jr. Nortel Emetrotel Consultant
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Kinda hard to do a Call Center over a cell phone. And can you imagine calling into Customer Service and their cell phone is cutting in and out. People expect crappy service from their cell phone. But mess around with their desk phone and they are pissed.
Think about the number of kids today that have never had a home phone as well as the age that they get their own Iphone or Andriod etc. These are the leaders of tomorrow and there are already lots of them coming out of college and stepping into the workplace with no concept of a corded type of phone.
We had an intern here last summer that kept popping into her boss's office every time she was called, when asked why she kept doing that she said "I can see your name on the display when it rings but I have no idea how to work one of those" and she pointed at the 9611 on her bosses desk.
Personally I like the separation I get with a desk phone, I go home it stays here. But more and more everything (Contact center included) is becoming a soft client. Is that soft client going to be an agent app on an Iphone? eventually I think so.
We had an intern here last summer that kept popping into her boss's office every time she was called, when asked why she kept doing that she said "I can see your name on the display when it rings but I have no idea how to work one of those" and she pointed at the 9611 on her bosses desk.
Personally I like the separation I get with a desk phone, I go home it stays here. But more and more everything (Contact center included) is becoming a soft client. Is that soft client going to be an agent app on an Iphone? eventually I think so.
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Part of the problem is no one trains the new generation on how to use these devices. Putting a soft client on a cell phone isn't going to solve the problem. Whether a multi-line phone or single line phone is on a MAC, PC, IPhone, Android or a deskphone, they still won't know how to use the features such as park, hold, transfer, unless they have proper training. I put in a small E-MetroTel system at an office next door to my office. 12 users who had no idea how to use the features and were afraid of the 1140E phones. After an hour training session, they became much more comfortable with their phones and now use them all of the time.
Additionally, I heard it this way. Cell phones are good for one to one communications, personal communications. Deskphones are for one to many communications. Plus deskphones already exist without cords now....wifi deskphones. So that's what I try to explain in these arguments. Some people don't understand what a multi line phone is, and think of a desk phone as the old landline they had in their houose. Plus currently a deskphone sounds 100 times better than a cell phone....but soon cell phones will all have HD voice and sound much better.
I think there will always be a need for a deskphone....it will just come in different packaging.
Joseph Sus Jr. Nortel Emetrotel Consultant
Additionally, I heard it this way. Cell phones are good for one to one communications, personal communications. Deskphones are for one to many communications. Plus deskphones already exist without cords now....wifi deskphones. So that's what I try to explain in these arguments. Some people don't understand what a multi line phone is, and think of a desk phone as the old landline they had in their houose. Plus currently a deskphone sounds 100 times better than a cell phone....but soon cell phones will all have HD voice and sound much better.
I think there will always be a need for a deskphone....it will just come in different packaging.
Joseph Sus Jr. Nortel Emetrotel Consultant
OH, and I have to also say these users that warmed up to the E-MetroTel install I did are millenials and generation Z users. They said it was cool to have such a professional looking phone on their desk, they said it made them feel more important and easy to reach.
Joseph Sus Jr. Nortel Emetrotel Consultant
Joseph Sus Jr. Nortel Emetrotel Consultant
Johnthephoneguy
Technical User
I think they are going to soft phones over traditional desktops.
JohnThePhoneGuy
"If I can't fix it, it's not broke!
JohnThePhoneGuy
"If I can't fix it, it's not broke!
Firebird Scrambler
Programmer
It's funny that I got wind of Avaya's problems in December
I think the interesting question will be if anyone takes over the running of the CS1000e and perhaps oversee some of their older EOL products. Does the US military still have many sites installed with Nortel / Avaya kit such as Option 11c based products?.
I agree with all the previous comments. Although the future will be users with headsets sticking out of their laptops via softphones etc, there will always be a need to have traditional phones in places where they are needed such as public places, safety reasons, Reception etc.
For me, some of my trusted kit such as my test handset will shortly be consigned to the back of the car and only shown to curious people who ask questions on what it was used for after analogue technology becomes less used than IP.
They were the days eh!.
Firebird Scrambler
Nortel & Avaya Meridian 1 / Succession & BCM / Norstar Programmer
Website = linkedin
I think the interesting question will be if anyone takes over the running of the CS1000e and perhaps oversee some of their older EOL products. Does the US military still have many sites installed with Nortel / Avaya kit such as Option 11c based products?.
I agree with all the previous comments. Although the future will be users with headsets sticking out of their laptops via softphones etc, there will always be a need to have traditional phones in places where they are needed such as public places, safety reasons, Reception etc.
For me, some of my trusted kit such as my test handset will shortly be consigned to the back of the car and only shown to curious people who ask questions on what it was used for after analogue technology becomes less used than IP.
They were the days eh!.
Firebird Scrambler
Nortel & Avaya Meridian 1 / Succession & BCM / Norstar Programmer
Website = linkedin
bhassell2000
Technical User
There are some Gov/Military site with 2100s or AS5300s that I am aware of so I would guess someone would need to support these lines. I am not sure about any CS1000s though
Thanks,
Buddy
Linked in Profile
Thanks,
Buddy
Linked in Profile
Unfundednut
IS-IT--Management
*cough* Chiming in with an Option 61C from 1996. Can I get support 
?
Option 61C
Version 1811
Release 22
Issue 46
?Option 61C
Version 1811
Release 22
Issue 46
Firebird Scrambler
Programmer
There will always be support for the EOL systems (even current systems where possible). That's why we have forums such as Tek-Tips!. Ha-ha!
Firebird Scrambler
Nortel & Avaya Meridian 1 / Succession & BCM / Norstar Programmer
Website = linkedin
Firebird Scrambler
Nortel & Avaya Meridian 1 / Succession & BCM / Norstar Programmer
Website = linkedin
Johnthephoneguy
Technical User
The govt still has many many cs1k. Avaya hasn't given up completely on that line because they are still under contract with the govt to maintain them. I called in yesterday and had 2 offices that had to have cards replaced and it was no problem calling Avaya and getting it taken care of.
JohnThePhoneGuy
"If I can't fix it, it's not broke!
JohnThePhoneGuy
"If I can't fix it, it's not broke!
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chippowell9
Technical User
Chapter 11 is a financial restructuring, something many successful companies have done. Avaya has been profitable (before debt payments) and making huge investments in R&D the last several years. The only real problem - from the business side - is the debt load they have because of the leveraged buyout by Silver Lake Partners & TPG in 2007. That happened right as the economy tanked, and although they were making good money again by 2010, they didn't make enough to be able to manage the debt. Now those big debt balloon payments are coming due, and although Avaya is making money, the debt needs to be restructured. Kind of like when you have a good income, but you get into bad credit card debt or you got upside down on your house! You know you have the resources to fight your way out of it.
We are running parallel CM and CS1K systems now, doing a slow migration from Blue to Red. I tell you what, I love the Avaya 96xx phones and System Manager admin tool, not to mention the mobile clients.
Deskphones certainly do not have the cache they once did, but some environments will be keeping them for a while (legal, financial...white collar jobs). From personal experience, if I'm trying to make a serious business call, I hate having to do that on my cell. Sounds horrible!
We are running parallel CM and CS1K systems now, doing a slow migration from Blue to Red. I tell you what, I love the Avaya 96xx phones and System Manager admin tool, not to mention the mobile clients.
Deskphones certainly do not have the cache they once did, but some environments will be keeping them for a while (legal, financial...white collar jobs). From personal experience, if I'm trying to make a serious business call, I hate having to do that on my cell. Sounds horrible!
Nortel Norstar is still very much alive in businesses with less that 10 to 12 people and 3 to 4 trunk lines. What I noticed is the Option Switches are being replaced with VoIP systems. In fact AT&T analog 2 and 4 line sets are popular in Centrex applications!
RKDavis Wilmington,NC
RKDavis Wilmington,NC
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