A focus on growth amid headwinds caused a liquidity crunch for Avaya, a $2 billion multinational cloud communications and service firm with 150 entities worldwide. The lenders behind $3 billion of debt wanted to know how to protect their interests.

Ambitious rescue targets

A new CEO was appointed to drive an aggressive company-wide transformation, and AlixPartners was asked to assess the feasibility of strategic alternatives and achieve a cost-reduction target of $500 million within a year. 

We set up a program management office and assigned workstream leads to prioritize major cost take-out initiatives in 50 countries, and drive $525 million of EBITDA improvement.

Simultaneously, we implemented a capital restructuring.

Leading through the restructuring

AlixPartners took on interim roles as chief restructuring and chief financial officers with the express goals of improving financial credibility and pursuing a lasting operational and capital restructuring. Our contingency planning efforts included managing lender constituents, maintaining adequate liquidity, and devising an aggressive but viable plan to support capital structure negotiations. This all took place across international borders, with a complex web of lenders. Eighteen months on, we delivered.

Our nearly $2 billion transformation program delivered a $550 million savings pipeline, and provided visibility and credibility to stakeholders on jurisdictional and internal issues around cash management and valuation, as well as the greater transformation strategy.

As a result of these critical early restructuring efforts, over $550 million in new financing was under negotiation to satisfy near-term maturities and address critical liquidity needs.