Avaya Gets the Go-Ahead for an Official Exit from Chapter 11

We speak to Avaya about their emergence from bankruptcy

Unified Communications

Published: December 1, 2017

Rob Scott

Publisher

This year has been a complicated one for Avaya, who entered Chapter 11 bankruptcy towards the beginning of January, to restructure the financial side of their business in a way that would potentially deliver more opportunities for the future of the business. Since then, the telecommunications giant has presented several different plan ideas for their re-emergence from Chapter 11, and it seems that the third time really is the charm.

According to Judge Stuart Bernstein of the U.S. Bankruptcy Court, the latest plan will be confirmed and supported by an upcoming rubber stamp approval just before Christmas. This could be the ideal festive gift for Avaya, who has spent a year carefully adjusting their strategy to hopefully give the best results to customers, shareholders, and partners alike.

We spoke to EMEA and APAC president for Avaya International, Nidal Abou-ltaif about the latest news.

How Does It Feel to be Officially Leaving Chapter 11?

On the 28^th of November, the courts give Avaya official approval for their financial restructuring plan, meaning that they can now go ahead with their strategy to exit Chapter 11.

“If we finish all of this by the 15^th of December, it will be rubber-stamped, which means that we’ll be officially exiting Chapter 11 within a couple of weeks.”

Avaya will be re-entering the market as a public company, and reducing their debts by more than 50% in the process, meaning that they have more opportunities than ever to invest in development and innovation for their brand.

“We now have the resources we need to innovate, and develop our platform, as well as investing in new technology like AI and blockchain.”

What Impact Will This Have on the Wider Avaya International Market?

Although not every segment of Avaya International was affected by the Chapter 11 bankruptcy, the whole business seems to have been collectively fighting towards an exit for the last year. I was keen to know what Nidal thought the overall impact of the announcement would be on Avaya International.

“I think everyone was already confident that we would be getting out of Chapter 11, but this announcement gives people some much-needed relief, and ensures that we’re all re-energised for the fight to win more of the telecommunications market. Ultimately, we didn’t lose business because of Chapter 11 at all – our customers stood by us, and we continued with business as usual, but now we’re finally free of the stigma.”

Have Partners and Customers Remained Loyal?

Nidal told me that people have been standing by Avaya over 2017 – regardless of the Chapter 11 bankruptcy issue.

“What makes Avaya so great is the customers, business partners, and people. We help to make people successful, and they pay us back with their loyalty.”

For Avaya, getting back into the market isn’t a matter of playing catch-up. Instead, it represents an opportunity to start exploring some areas that they may not have had a chance to invest in while the financial restructuring was taking place.

“We’ll be going more aggressively into acquisitions, R&D, and business development. What we couldn’t do in Chapter 11 was invest in cloud-related things, and we needed to start getting rid of parts of the business that weren’t relevant to our growth. Now, we’re ready and engaged to start doing new things.”

What Can We Expect from Avaya in 2018?

As many UC companies begin to plan their strategy for 2018, I was keen to hear what we could expect from Avaya in the coming months. Jim Chirico recently released a statement saying that Avaya will soon emerge from Chapter 11 “stronger than ever” and prepared to invest in long-term success. Nidal echoed that sentiment, saying that things look positive for the future.

“Our first official meeting with the board will take place next week, where we’ll begin to discuss our strategy for 2018. We recently went through a workshop experience, and soon we’ll be able to share our plan with the world.”

Before our conversation ended, Nidal noted that he wanted to thank the customers, partners, and shareholders that had stuck with the company over the last year. He also said that the media had been particularly nice to Avaya, acting as professionally as possible in the circumstances. If anything, I think that this sense of community around Avaya through 2017 has been a sign of just how much customers and partners alike appreciate the brand.

Congratulations Avaya.

More on the Avaya Chapter 11 journey:

Artificial Intelligence Mergers and Acquisitions