Avaya Discusses Bankruptcy That Would Give Lenders Control

Avaya Holdings Corp. has held talks with lenders over a plan that could hand them control of the company as part of a bankruptcy filing, according to people with knowledge of the situation.

The Chapter 11 filing, which allows a company to keep operating while working out a plan to repay creditors, could come as soon as the end of the month, said the people, who asked not to be identified because the matter is private. The company has been in negotiations with first-lien lenders including Apollo Global Management, Ares Management and Invesco, the people added.

The telecommunications firm has also started discussions with select lenders about potential debtor-in-possession financing to help fund the company while in bankruptcy, the people said. Talks are ongoing and plans could change, they added.

Representatives with Avaya, Apollo and Ares declined to comment. Messages left with Invesco were not returned.

Avaya last month disclosed that it received multiple restructuring proposals from creditor groups, with some pushing for the company to restructure via bankruptcy, while others wanted Avaya to stay out of court, according to regulatory filings.