Avaya Confirms New CEO, Pension Plan Strategy for Bankruptcy Court Hearing
Avaya COO Jim Chirico will succeed Kevin Kennedy as CEO, effective October 1, 2017. Avaya disclosed the CEO transition, preliminary Q3 2017 financial results, pension plan strategies, and next steps in its bankruptcy reorganization plan this morning.
On the executive front:
- Kennedy, current president and CEO, will retire at the end of September but has agreed to remain as an advisor to the company. Under Kennedy, the company transitioned nearly 80 of its revenues to software and services. However, the company also went bankrupt amid the IT industry’s shift to cloud and mobile services.
- Chirico joined the company in 2008. Most recently, he was COO and global sales leader, responsible for Operations, Global Sales, Sales Operations, Human Resources and Quality. Earlier, he held key posts at IBM and Seagate.
Avaya hopes to emerge from chapter 11 bankruptcy protection later this year. A court hearing on the company’s reorganization plan is set for August 23, 2017.
Avaya Amended Plan for Reorganization, Pension Plan Statement
In preparation for that hearing, Avaya today announced that it has develops an amended plan for reorganization, which has the support of major stakeholders, the company says.
Key terms of the Amended Plan, according to the company, include:
- The reduction of debt by more than $3 billion from pre-filing levels;
- The settlement and transfer to PBGC (U.S. Pension Benefit Guaranty Corp of Avaya’s obligations under the APPSE (Avaya Pension Plan for Salaried Employees);
- The company’s continued support of its obligations under the Avaya Pension Plan (“APP”); and
- Initiation of steps to enable the firm to emerge from chapter 11 as a public company.
We’re checking in with Avaya for a clearer definition of the company’s long-term pension plan strategy.
Preliminary Q3 2017 Results
Avaya this morning said fiscal quarter 2017 revenue is expected to be in the range of $802 to $804 million, approximately flat sequentially and a decline of 9% from the third quarter of the prior year. Adjusted EBITDA is expected to be in the range of $202 million to $206 million, or 25.1% to 25.7% of revenue.