Avaya Reportedly Faces Bankruptcy

by San Antonio Attorney

Avaya has almost reached an agreement to sell its call-center and may possibly file for bankruptcy, according to reports.

The multinational tech company has been shifting from a hardware company to a software and services business, and is searching ways to minimize its debt load.

Avaya is expected to file for Chapter 11 bankruptcy as early as December, according to the Wall Street Journal.  The filing would probably take place after an agreement is made to sell the contact-center company, the report says.

Private equity firm Clayton Dubilier & Rice is one of the prospect buyers of the business, the article said.  The sale is expected to generate around $4 billion for Avaya.

Should the sale ensue, Avaya could get the funds to repay some of its senior creditors, while its other creditors would be able to trade debt for shares in a restructured company upon its exit from bankruptcy, the report said.

But Avaya has not yet confirmed a Chapter 11 bankruptcy filing or possible sale.

Brendan Read, leading analyst at Frost & Sullivan, thinks Avaya is on the right track in taking into consideration the sale.

Read said the brand of Avaya is strong owing to its most extensive portfolios of call-center solutions and expansion instruments in the industry these days.  He also said Avaya continues to build client loyalty and improve its methods.  However, the outlook of the company in the call-center industry is jeopardized by the swing to cloud applications, according to Read.

Furthermore, Avaya face stiff competition from new customer contact systems such as automated text, mobile, and web communications with clients, he said.

Read also said the North American call center industry has reached its prime.  Frost & Sullivan study predicts a minor dive in the number of agent jobs.

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