Lenders who helped provide a $350 million leveraged loan to Avaya Holdings Corp. in June are working with FTI Consulting Inc. and Glenn Agre Bergman & Fuentes to explore their options following the company’s poor earnings and internal investigations, according to people with knowledge of the situation.
(Bloomberg) — Lenders who helped provide a $350 million leveraged loan to Avaya Holdings Corp.
in June are working with FTI Consulting Inc. and Glenn Agre Bergman & Fuentes to explore their options following the company’s poor earnings and internal investigations, according to people with knowledge of the situation.
With revenue plunging and a large chunk of convertible debt maturing in less than a year, Avaya said it now has “substantial doubt” about its ability to continue as a going concern and has hired advisers to address the upcoming maturities, according to a statement on Tuesday.
Avaya is getting advice from AlixPartners LLC, Evercore Inc. and long-time counsel Kirkland & Ellis, the people said.
Representatives for Avaya, FTI, AlixPartners and Evercore declined to comment.
Representatives for Glenn Agre and K&E didn’t respond to requests for comment. The Wall Street Journal earlier reported Kirkland’s hiring.
Avaya, which makes telecommunications software, sold a $350 million leveraged loan and a $250 million exchangeable note on June 24 to help refinance debt, then shocked investors when it forecasted a sharp drop in financial performance weeks later and fired its chief executive.
Some holders of the company’s older loans and bonds, which earlier organized with Akin Gump Strauss Hauer & Feld, are concerned about Avaya and its bankers’ lack of disclosures when marketing the debt, and further financial deterioration at the company, the people said.
Read more: Avaya, Goldman, JPMorgan Face Lender Ire After Loan’s Collapse
Financial results Avaya released Tuesday morning were in line with its earlier revisions, but the company revealed that it was facing deep financial strain.
It’s delaying filing its quarterly financial statements amid ongoing internal investigations related to a whistleblower letter and its financial results for the quarter that ended June 30.
Avaya’s shares plunged 46% on Tuesday to around 60 cents.
Its 6.125% bond due 2028 was among the worst performers in the high-yield market, dropping 7.25 cents on the dollar to 49 cents, while its convertible bonds due 2023 fell by more than half. The company’s older loans are quoted in the low 50s, while the new loan is in the mid-60s, the people said.
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