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Avaya Amends Bank Credit Facility

04-30-2003

Avaya Inc. (NYSE: AV), a leading global provider of communicationsnetworks and services for businesses, today said it has amended itsexisting five-year, $561 million credit facility. The amendedfacility requires the company to have a minimum amount of EarningsBefore Interest, Taxes, Depreciation and Amortization (EBITDA) foreach of the four-quarter periods ending June 30, 2003, and Sept.30, 2003, of $190 million and $220 million, respectively. Forfiscal 2004, the reduced minimum EBITDA requirements increasequarterly from $230 million to a maximum of $350 million. This is areduction of $50 million from the previous maximum of $400 million.The credit facility provides for similar adjustments to therequired ratio of EBITDA to interest expense.

Avaya Inc. (NYSE: AV), a leading global provider ofcommunications networks and services for businesses, today said ithas amended its existing five-year, $561 million credit facility.The amended facility requires the company to have a minimum amountof Earnings Before Interest, Taxes, Depreciation and Amortization(EBITDA) for each of the four-quarter periods ending June 30, 2003,and Sept. 30, 2003, of $190 million and $220 million, respectively.For fiscal 2004, the reduced minimum EBITDA requirements increasequarterly from $230 million to a maximum of $350 million. This is areduction of $50 million from the previous maximum of $400 million.The credit facility provides for similar adjustments to therequired ratio of EBITDA to interest expense.

The amended facility permits the company to increase theexisting $100 million limitation on cash it can use to repurchaseLiquid Yield Option™ Notes (LYONs) by the amount of net cashproceeds from certain offerings in the capital markets and by 50percent of the net cash proceeds of certain asset sales. Theincrease allows the company to raise the amount of cash it can useto repurchase LYONs from $100 million to a maximum of $400million.

In connection with the amendments, Avaya has reduced the amountof the credit facility to $250 million. Avaya noted the amendedfacility does not require any further reduction in the size of thefacility. The credit facility is available to the company forgeneral corporate purposes. Based on its increased cash positionover the last several quarters, Avaya believes the amended facilityis adequate for current capital needs.

"The amended credit facility is evidence of Avaya's improvingfinancial strength," said Garry McGuire, chief financial officer,Avaya. "Avaya's cash balance has increased substantially in each ofthe last three quarters to $724 million, primarily through positivecash flow from operations. The additional efficiencies we've driventhroughout the business have helped increase margins and loweroperating expenses. Given these improvements, we believe thefacility is appropriately sized for our business needs."

About Avaya
Avaya Inc. designs, builds and managers communications networksfor more than one million businesses around the world, including 90percent of the Fortune 500®. A world leader in secure and reliableInternet Protocol (IP) telephony systems, communications softwareapplications and services, Avaya is driving the convergence ofvoice and data application across IT networks, enabling businesseslarge and small to leverage existing and new networks to enhancevalue, improve productivity and gain competitive advantage. Formore information visit the Avaya Web site: http://www.avaya.com

This news release contains forward-lookingstatements regarding the company's view of its operating resultsand financial position based on current expectations, forecasts andassumptions that involve risks and uncertainties that could causeactual outcomes and results to differ materially. These risks anduncertainties include, but are not limited to, general industrymarket conditions and growth rates and general domestic andinternational economic conditions including interest rate andcurrency exchange rate fluctuations and the economic, political,and other risks associated with international sales and operations,U.S. and foreign government regulation, price and productcompetition, rapid technological development, dependence on newproduct development, the successful introduction of new products,the mix of our products and services, customer demand for ourproducts and services, the ability to successfully integrateacquired companies, control of costs and expenses, the ability toimplement in a timely manner our restructuring plans, and theability to form and implement alliances. For a further list anddescription of such risks and uncertainties, see the reports filedby Avaya with the Securities and Exchange Commission. Avayadisclaims any intention or obligation to update or revise anyforward-looking statements, whether as a result of new information,future events or otherwise.

NOTE: Liquid Yield Option and LYON are trademarks ofMerrill Lynch & Co., Inc.

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