Avaya appoints former Seagate CFO as it heads out of $6.3bn bankruptcy protection
New CFO Patrick O’Malley restructured Seagate and now has the same task at bankrupt Avaya
Avaya has appointed a new CFO as it clears the way to emerging from bankruptcy protection.
The new CFO is Patrick O’Malley, who spent a 30-year career with Seagate Technology, including seven years as CFO until 2015.
He replaces David Vellequette, who officially leaves at the end of 2017, after staying on “to ensure a smooth transition and help complete Avaya’s debt restructuring and public listing efforts”.
O’Malley has form with debt restructuring – at Seagate following the 2008 financial crisis. He also “played an integral role in helping the company with its re-listing on the Nasdaq after two years of private ownership”, said Avaya.
Jim Chirico, president and CEO of Avaya, said: “Pat is a proven public company executive, whose experience is directly relevant to building Avaya’s next chapter, including our emergence from Chapter 11 as a public company.”
The company said its revenue was flat and falling, with fourth quarter revenue down from $1 billion to $958 million and a net loss for the whole year of $750 million.
Reports in January put the company’s total debt at $6.3 billion. “We have conducted an extensive review of alternatives to address Avaya’s capital structure, and we believe pursuing a restructuring through chapter 11 is the best path forward at this time,” said Kevin Kennedy, CEO when the company went into Chapter 11.
Private equity groups Silver Lake and TPG Capital bought Avaya in 2007 for $8.2 billion, but Avaya took out loans after the deal and had to pay $400 million a year in interest. The company was created 20 years ago from the office equipment business of Lucent, and added bankrupt Nortel’s office equipment business in 2009 after a $900 million acquisition.
O’Malley said: “I look forward to working closely with Jim and the team to help position the company for the future, including capitalizing on the immense opportunity ahead and setting Avaya on a path of long-term, sustainable growth.”