Its then shareholders – private equity investors Silver Lake and TPG Capital – lost their money while creditors had their debt converted to equity to reconstruct the company.
Stock in the restored company started trading on Wednesday, the first time Avaya shares have been traded since the private equity acquisition in 2007. Debts are now $2.9 billion.
CEO Jim Chirico, who took over after Avaya was placed in Chapter 11 bankruptcy protection in January 2017, said: “Building upon our history of innovation and expertise in deploying globally scalable solutions, Avaya sits today at the strategic nexus of connectivity for the enterprise – with more than 130,000 customers in 220,000 locations worldwide, 90% plus of the Fortune 100, and more than 100 million users.”
Avaya was created in 1995 from the office equipment business of Lucent Technologies – the rest of which went on to become Alcatel-Lucent and is now owned by Nokia. In 2009, after the $8.2 billion private equity takeover, Avaya bought the enterprise solutions business of bankrupt Nortel for $900 million.
When it filed for Chapter 11 bankruptcy in January 2017 revenue was flat and falling. It faced a $600 million interest payment for the debts run up by the private equity owners.
“It is an honour to mark this first day of trading on the NYSE for the new Avaya, which is more focused than ever on leading the industry’s digital transformation.” said Chirico
The share listing on the NYSE “will provide increased transparency to our various stakeholders with a goal of creating long-term value for our new stockholders”, he said in advance of the listing.