Avaya Cuts 1,900 Jobs, Lowers Forecast, Sells Stock (Update7)
By Justin Baer
quote.bloomberg.com
Basking Ridge, New Jersey, March 11 (Bloomberg) -- Avaya Inc., the biggest U.S. maker of office telephone equipment, cut 1,900 jobs, lowered its fiscal second-quarter sales forecast and said it plans to sell $100 million in stock to raise cash.
Avaya also agreed to transactions to give Warburg Pincus LLC a 16 percent stake in the company. Standard & Poor's Corp., concerned that the moves won't restore profits, dropped Avaya's credit rating to junk. Moody's Investors Service also reduced some ratings on the company to below investment grade.
Proceeds from the Warburg accords, the stock offering and the possible sale of Avaya's cabling unit will be used to pay down the company's $1 billion in debt, Chief Financial Officer Garry McGuire said in an interview. After paring 26 percent of its workforce last year, Avaya is trimming more jobs to conserve cash amid a slowdown in corporate spending on networking gear. |
