Shares of Avaya Holdings Corp. (NYSE: AVYA) cratered in morning trading on Friday after the Wall Street Journal reported that the cloud solutions company could be close to bankruptcy.
The company disclosed earlier this week it was currently reviewing different restructuring proposals from various creditor groups.
The report stated that one such plan, supported by senior lender Apollo Global Management, “would significantly reduce Avaya’s debt load through chapter 11, wipe out shareholders and, pending the completion of an internal investigation into controls over financial reporting, provide directors and executives with releases from potential litigation.”
Another plan looks at restructuring the company out of court through the issue of new bonds and loans to retire some of its debt. This plan is supported by Avaya’s unsecured bondholders, according to WSJ.
Earlier this week, Avaya had indicated that it was having “constructive” discussions with its financial stakeholders to resolve its balance sheet issues.
Shares of AVYA have seen a massive erosion in value of more than 95% in the past year.
