Avaya‘s bankruptcy situation has led the company to file for Chapter 11 protection.
The telecommunications company has been struggling for a while now due to the fact that it has failed to properly transition from a hardware-driven company to an organization that benefits primarily from software and services. The industry as a whole has experienced a similar downturn, and Avaya is bankrupt as a result.
The company is looking to unload a debt load amounting to $6.3 billion, and there are several companies in the running to acquire Avaya, including Clayton Dubilier & Rice. The firm is leading the pack to buy the company for $4 billion.
Avaya agreed to a January deadline to agree with credits in order to address its debt or default. Something that the company refuses to do is sell its call center as it believes selling it would not allow the company to receive optimal value for its customers and creditors.
The company is in talks to sell other parts of its business that could help it to reduce debt. Avaya needs serious restructuring to survive as the telecommunications brand has an old financial structure in line.
The system that’s in place for the company is quite dated as it was put in place 10 years ago to help Avaya function as a hardware business.
In its fourth quarter of 2016, the company raked in $958 million in revenue, or about $42 million less than the same quarter in fiscal 2015.
