{"id":19990,"date":"2017-01-21T07:07:47","date_gmt":"2017-01-21T07:07:47","guid":{"rendered":"http:\/\/www.biphoo.com\/bipnews\/?p=19990"},"modified":"2017-01-21T07:07:47","modified_gmt":"2017-01-21T07:07:47","slug":"u-s-bankruptcy-court-judge-oks-425-million-avaya-loan","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/business\/u-s-bankruptcy-court-judge-oks-425-million-avaya-loan.html","title":{"rendered":"U.S. bankruptcy court judge OKs Dollar 425 million for Avaya loan"},"content":{"rendered":"
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U.S. bankruptcy court judge OKs Dollar 425 million for Avaya loan<\/strong><\/span><\/h2>\n

U.S. bankruptcy court judge OKs Dollar 425 million for Avaya loan:-<\/strong> A U.S. bankruptcy court judge granted Avaya Inc approval on Friday to tap $425 million of the $725 million loan proposed to carry the telecommunications company through its restructuring, funds the company said were essential to continue operations.<\/span><\/p>\n

Avaya filed for Chapter 11 bankruptcy protection on Thursday to cut its debt of about $6 billion after efforts to sell its call center business and reach a consensual deal with creditors failed.<\/span><\/p>\n

The bankruptcy underscored the challenges telecoms companies face as they transition to software and services from hardware.<\/span><\/p>\n

“The company has taken a decisive step to rightsize its balance sheet,” Pat Nash, one of the company’s attorneys, told Judge Stuart Bernstein at the U.S. Bankruptcy Court for the Southern District of New York.<\/span><\/p>\n

Nash said Avaya would be “marrying a balance sheet restructuring with an operational transformation.”<\/span><\/p>\n

The company’s lawyers said a significant portion of the $725 million loan, extended by an affiliate of Citigroup Inc (C.N) for up to a year, was funded by Avaya’s existing lenders.<\/span><\/p>\n

Avaya plans to return to U.S. bankruptcy court on Monday for approval on other expenses.<\/span><\/p>\n

Buyout firm Clayton, Dubilier & Rice LLC (CD&R) had been in the lead to acquire Avaya’s call center business for about $4 billion. But Avaya and CD&R could not agree on price, terms or how the deal would effect Avaya’s pension obligations, a person familiar with the matter said on Thursday.<\/span><\/p>\n

Avaya has liabilities totaling about $1.5 billion stemming from its pension and other promised post-employment benefits.<\/span><\/p>\n

The Santa Clara, California-based company faced potential penalties from lenders on Jan. 28 after it did not turn in its annual financial statements for its fiscal year on Dec. 29.<\/span><\/p>\n

Avaya has consistently reported losses, stemming in part from costs related to its debt. It was taken private in 2007 for $8.2 billion by private equity firms Silver Lake Partners LP and TPG Capital LP.<\/span><\/div>\n

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