Durham, NC-based Avaya Holding Corp., a leading player in networking, has officially filed for Chapter 11 bankruptcy protection in a Texas federal court. According to the company, Avaya’s “Restructuring Support Agreement” will reduce its total debt by more than 75 percent, from approximately $3.4 billion today to approximately $800 million. In addition, Avaya has secured committed financing of approximately $780 million. The company said it expects this financial restructuring to be completed within 60 to 90 days.
RingCentral Inc., a leading provider of global enterprise cloud communications, video meetings, collaborations, and contact center solutions, announced that it has extended and expanded its strategic partnership agreement with Avaya. As a part of Avaya’s expedited recapitalization, the partnership will see Avaya Cloud Office by RingCentral remain Avaya’s exclusive Unified Communications as a Service (UCaaS) solution for Avaya’s customers.
What’s Ahead for Avaya
Avaya will now do business as a privately held corporation following its delisting from the New York Stock Exchange. The restructuring should be viewed favorably by both customers and channel partners, now that Avaya’s financial situation has been stabilized and the company is able to carry out its “Innovation without Disruption” vision, which enables customers to maintain their current assets while adding more digital services using the cloud.
According to Ganesh Reddy Bonthu, an analyst at Quadrant Knowledge Solutions, “This move will give Avaya the time to breathe and restructure their business to make a strong fightback.” “The strategic partnership with RingCentral will unlock further opportunities for both companies to maximize value for their customers, such as go-to-market models that enable Avaya to sell Avaya Cloud Office to its installed base on a direct basis.”
Author: Ganesh Reddy Bonthu, Research Analyst, Quadrant Knowledge Solutions.