Bloomberg reported last week that Avaya’s long-deferred IPO could materialize in April. That date isn’t carved in stone, however, so don’t assume that it’s a done deal. A lot can happen between now and then.
Avaya’s latest quarterly financial report featured a reduced loss, though revenue growth remains tepid at best. Most of the improvement on the balance sheet resulted from cost-cutting measures,
From what I have learned, Avaya continues to pursue assiduous cost reductions. In fact, I was informed last week that Avaya dismissed about 70 call-center employees at its Highland Ranch and Westminster locations near Denver, Colorado.
The source for that bit of news appears to have been one of Avaya’s former employees, who provided me with said news before his (or her) corporate email account was shut down. He (or she) actually sent the information to me as a comment to an earlier post I wrote about Avaya’s seemingly frozen IPO plans.
Regular readers of this blog will know that I invite readers to submit confidential information via email. If sources wish to remain anonymous, I am more than happy to oblige.
In this case, what surprised me was that the information arrived in what would have been a public blog comment attributed to an employee (well, former employee) of Avaya. When I saw the email address, I replied to ask whether the individual wished to have me withhold the comment and remain so that he or she could remain an anonymous source. My reply bounced, leading me to deduce in Sherlock Holmesian fashion that the source was, in fact, one of the Avaya employees affected by the cuts. A brief online investigation confirmed that the individual in question worked at one of the locations hit by the purge.
IPO Preferred to “Nortel Option”
Even though the individual no longer works at Avaya, I don’t feel comfortable publishing the comment. I don’t want this person to potentially compromise his (or her) career prospects because of something that might have been done hastily and without due consideration to professional consequences.
As for Avaya, the update on the IPO plans, however tentative, couldn’t come at a better time. Toward the end of last year, Jeff Hawkes offered a detailed analysis and sobering assessment of Avaya’s prospects. Hawkes concluded that the company, encumbered with substantial long-term debt, faced the choice of a public offering or an asset sale, along the lines of the one Nortel executed as part of bankruptcy proceedings. In fact, Hawkes suggested there was strong possibility that Avaya might file for “Chapter 7 or 11 bankruptcy.”
For now, though, the slow-rolling IPO is back on track. We’ll have to see whether it reaches its destination this spring.
Reblogged this on thesubjectsteve.
“The Nortel Option” You crack me up.
The other interesting bit here is whether or not the private equity folks can turn a profit on networking companies. If this happens, it would be the first significant exit and potentially set the stage for other PE/networking/comms transactions. Then again, I doubt we’ll see deals with the amount of debt these guys and Brocade took on again soon.
Avaya needs to hang up the proverbial phone and walk away.
The company annouced Wednesday more layoff’s 44 people. I will be one of them…