Avaya Explains Why They've Declared Bankruptcy (networkworld.com)

Friday Avaya's Corporate Treasurer explained why they're filing for a chapter 11 "restructuring." After examining their debt, "we decided it was a critical next step in our transformation from a hardware company to a software and services company and the best path forward for our customers, partners and employees." skidv writes: ZDNet breaks down the deal... "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." Not surprising, Avaya has canceled the planned IPO.
PC World reports that Avaya "emerged from Lucent Technologies in 2000 with a focus on phone switches, enterprise networking gear, and call-center systems. But with the shift toward mobile phones and cloud-based tools for communication, and a tight market for enterprise network equipment, the company has been changing its focus... Like much of the networking and collaboration industry, Avaya is looking toward software-defined networking, IoT, and cloud-based platforms that work on many different devices and the web."

Comments

Translation

[Alain Williams]

Although we have lots of money and good prospects in our new products we don't want to pay our bills to our old suppliers. So we will shaft our old suppliers by getting out of paying them by using Chapter 11 financial magic. The following was not said: and management will be able to award itself bumper bonuses next year as a result.

Something's not right here

[rsilvergun]

Avaya is probably 40-50% of the business phones out there and probably 90% of the phones used in call centers. There's no way they shouldn't be profitable. Were they the victim of yet another leveraged buyout (think Bain Capital) scam?