Mitel has received approval for its restructuring plan from the US Bankruptcy Court for the Southern District of Texas. The company confirmed in March that it had filed for Chapter 11 bankruptcy.
Mitel said in statement that it expected to complete its restructuring process within the current calendar quarter, resulting in significantly less debt and a stronger capital structure that will support future growth.
The reorganisation plan was designed to address growing market demand for hybrid communications solutions and ensure continued support for Mitel’s more than 70 million users across more than 100 countries.
Tarun Loomba, chief executive officer of Mitel, said, “Approval of our plan is a major milestone as we near the conclusion of our financial restructuring. Over the past several months, we have worked diligently to strengthen Mitel’s financial foundation, and we are proud to have done so with the strong support of our employees, partners, customers, and lenders.
“With a more efficient capital structure in place, we’re well-positioned to accelerate growth and sharpen our focus on delivering flexible, secure, and mission-critical communications solutions. We look forward to completing this process in the near term and to emerging as an even stronger vendor, employer, and business partner—continuing our leadership in hybrid communications for years to come.”
Under the terms of the plan, Mitel will eliminate approximately $1.15 billion in debt and reduce its annual cash interest expense by approximately $135 million. The company will also have access to $64.5 million of exit financing to support its go-forward operations.
The company has also been honouring its obligations to vendors, who will be paid in full for all claims under the plan. Mitel will complete its financial restructuring and emerge from the Court-supervised process after the transactions included in the plan are completed and certain customary regulatory approvals are obtained.
Mitel is advised by Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal advisor, FTI Consulting, Inc. as financial advisor, and PJT Partners LP as investment banker. The Ad Hoc Group of senior lenders is advised by Davis Polk & Wardwell LLP as legal advisor and Perella Weinberg Partners LP as investment banker.