Mitel Networks Files Chapter 11 Bankruptcy, Seeks Debt Restructuring

Mitel Networks Corporation has filed for Chapter 11 bankruptcy protection in Texas, with a plan to restructure and eliminate $1.15 billion in debt. The telecommunications firm, which provides various communication services, struggled to adapt to the shift towards remote work during the COVID-19 pandemic, leading to increased competition and a decline in demand for traditional office solutions. Mitel's bankruptcy plan includes $124.5 million in new financing, comprising $60 million in debtor-in-possession financing to support ongoing operations and $64.5 million in exit financing. The company has the backing of a majority of its lenders and aims to emerge stronger by focusing on hybrid communications solutions. Operations outside of the U.S., Canada, and select UK segments will continue as usual, though the bankruptcy may lead to reassessment of supplier relationships among its customers. Mitel was previously acquired by private equity firm Searchlight Capital Partners in 2018 for $2 billion, which aimed to bolster its cloud service offerings.