Avaya Announces Global Resolution in Chapter 11 Restructuring

SANTA CLARA, CA--(Marketwired - October 24, 2017) -

Has Filed Second Amended Plan of Reorganization Supported by all Major Creditor Groups

Launches Exit Financing Process with Approximately $3 Billion in Commitments Secured

Remains on Track to Emerge in 2017

Avaya announced today that it has reached global consensus (the "Global Resolution") regarding the terms of a chapter 11 plan with its major creditors, including the Ad Hoc Group of First Lien Creditors (the "First Lien Group"), the Ad Hoc Group of Crossover Creditors (the "Crossover Group"), the Official Committee of Unsecured Creditors (the "Creditors' Committee"), and Pension Benefit Guaranty Corporation ("PBGC"). As a result of the Global Resolution, Avaya has filed a Second Amended Plan of Reorganization (the "Second Amended Plan") which, among other things: (a) increases recovery for holders of Second Lien Notes Claims to 4.0% of Reorganized HoldCo Common Stock, and distributes warrants for an additional 5.0% of Reorganized HoldCo Common Stock to holders of Second Lien Notes Claims; (b) reduces the distribution of Reorganized HoldCo Common Stock to holders of First Lien Debt from 91.5% to 90.5%; (c) increases PBGC's proposed cash recovery from $300 million to $340 million and reduces PBGC's recovery in the form of Reorganized HoldCo Common Stock from 7.5% to 5.5%; and (d) reduces recoveries available to holders of General Unsecured Claims to $57.5 million. Avaya has also entered into a plan support agreement with members of the Crossover Group. As a result, the Second Amended Plan is now supported by holders of more than two-thirds of Avaya's First Lien Debt and more than two-thirds of Avaya's Second Lien Notes.

Avaya has also filed a Disclosure Statement Supplement and, subject to customary approvals, will distribute that supplement to voting creditors. Additionally, Avaya has filed a request for an updated confirmation schedule to accommodate this resolution. Subject to those approvals, including confirmation of the Second Amended Plan, Avaya expects to complete its restructuring and emerge from chapter 11 protection in 2017.

Avaya also announced today that it is launching an exit financing process secured by fully underwritten commitments. Subject to Bankruptcy Court approval, these commitments include $2.925 billion of funded debt, including a $2.425 billion term loan underwritten by a group of banks led by Goldman, Sachs & Co. and Citibank, N.A.