A group of Avaya Inc. creditors led by Franklin Resources Inc. has approached other senior lenders, including Apollo Global Management LLC and Blackstone Group LP, about jointly negotiating a $6 billion debt restructuring, Bloomberg News reported yesterday. Franklin held initial talks with Apollo and Blackstone Group’s credit arm GSO Capital Partners, which lead the first-lien debt holders, over pushing the struggling software and services provider to restructure its balance sheet. Teaming up would make it easier to reach an agreement among investors and result in a more focused effort when dealing with the company, said one of the people. The talks came after the first-lien holders started urging Avaya, controlled by TPG Capital Management and Silver Lake Management, to cut debt in half because the interest burden has become unsustainable. The two private-equity firms acquired the Santa Clara, Calif.-based company in a 2007 leveraged buyout. Avaya has a $73 million interest payment due Sept. 1 on its $1.38 billion of 10.5 percent second-lien bonds due in 2021. Franklin held about a third of those securities at the end of June, according to data compiled by Bloomberg. The Franklin group’s holdings also overlap with GSO and Apollo in some of the first-lien debt.
