Avaya receives final approval for $725 million DIP financing

New York, March 10 – Avaya Inc. received final court approval for its $725 million debtor-in-possession financing facility, according to an order filed Friday with the U.S. Bankruptcy Court for the Southern District of New York.

The company had received interim approval on Jan. 23 giving it access to $425 million of the facility.

A final hearing was scheduled for Feb. 8 but was postponed to March 3.

The DIP financing facility is underwritten by Citibank NA.

In its original request, Avaya said the DIP financing, combined with its cash from operations, will provide sufficient liquidity during the Chapter 11 cases to support its continuing business operations and minimize disruption.

The financing will be used to repay $55 million outstanding under the company’s domestic ABL facility and $50 million outstanding under a foreign ABL credit facility; collateralize outstanding letters of credit totaling $67 million, with the ability to issue additional letters of credit up to a total of $150 million; fund $75 million into a segregated account to provide a liquidity backstop for international affiliates and provide incremental liquidity of at least $240 million on an interim basis and $530 million on a final basis.

Interest will accrue at either the base rate plus 650 basis points or Libor plus 750 bps.

The facility carries a 1% original issue discount and will mature 12 months from the closing date.

Avaya is a Santa Clara, Calif.-based provider of business collaboration and communications services. The company filed bankruptcy on Jan. 19 under Chapter 11 case number 17-10089.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.