After eight months of working through the painful process of Chapter 11 bankruptcy protection, Avaya now has a plan to move forward. Avaya first filed for bankruptcy protection in January 2017.
Avaya reported preliminary third quarter fiscal 2017 financial results on August 7, with revenue expected to be in the range of $802 to $804 million for a nine percent year-over-year decline. Full third quarter results are set to be released the week of August 14. The preliminary results were released alongside Avaya's amended Plan of Reorganization that aims to help the company exit Chapter 11 bankruptcy protection.
"Today's filings pave the way for Avaya's near term exit from chapter 11 and our return as a publicly traded technology company," Kevin Kennedy, president and CEO wrote in a statement. "The company will exit this process with an industry leading financial model preserved throughout the restructuring process, reduced complexity following the divestiture of our Networking business, strong innovation across our portfolio and commercial execution that exceeded the Avaya Business Plan."
Avaya sold its IP networking business unit to Extreme Networks for $100 million in May 2017. Avaya itself had initially acquired the IP networking business from bankrupt Nortel Networks for $900 million in December 2009.
In additional to the networking business unit sale, Avaya has come to agreements with its various creditors to reduce the company's overall debt by more than $3 billion from pre-bankruptcy filing levels. The full restructuring plan is set to go before a scheduled court hearing on August 23.
Avaya is also set to transition its executive leadership in the coming months. Current CEO Kevin Kennedy is set to retire at the end of September and will be replaced by Avaya's current Chief Operating Officer Jim Chirico, effective Oct. 1.
"Jim and I have worked together for nearly a decade, and I have witnessed firsthand the instrumental role he played in our successful transformation," Kennedy said. "I’m confident he has the knowledge, experience and skills to help Avaya effectively serve our customers, grow, continue the company’s spirit of innovation and capture even more market share."
Sean Michael Kerner is a senior editor at EnterpriseNetworkingPlanet and InternetNews.com. Follow him on Twitter @TechJournalist.