Avaya may file for chapter 11 bankruptcy protection and sell its call-center software unit in an effort to reduce its debt after years of losses. People familiar with the matter told the Wall Street Journal that the company wants to sell the call centre activities and then could file for chapter 11 as soon as next month.
Clayton Dubilier & Rice is among the potential buyers that participated in the most-recent round of bidding for the unit, which could fetch around USD 4 billion. Avaya could use the proceeds of the sale to pay off debt, while other creditors could be offered equity for their debt.
The company’s long-term debt was around USD 6 billion at the end of June. Avaya is owned by Silver Lake and TPG since 2007. In May, Avaya said it had hired Goldman Sachs and Centerview Partners to explore options including a sale or transaction to bolster its capital structure.
