Call centre software vendor Aspect Software has filed for bankruptcy with a plan backed by its creditors that would cut debt and bring the company out of Chapter 11 under the control of its lenders, according to court documents.

Aspect’s creditors agreed to eliminate $320 million of second-lien debt and convert $60 million of first-lien debt into 100 percent of the reorganised company’s equity, according to documents filed in the U.S. Bankruptcy Court in Delaware.

Aspect says that it is taking strategic action to facilitate its long-term growth, product innovations and ongoing pivot towards becoming the industry’s leading cloud-based provider. The company has entered into a pre-arranged agreement with certain unaffiliated holders of Aspect’s debt obligations, which provides for a financial restructuring and replacement of its existing credit facilities.

Under the pre-arranged agreement, which is subject to court approval, Aspect has negotiated an agreement with its existing lenders that will result in the reduction of more than $320 million of indebtedness, new secured financing and an infusion of fresh convertible debt capital to facilitate growth.

“This transaction marks a major milestone in the multi-year transformation of Aspect’s business, through which we have evolved from a legacy technology company that sold a limited set of on-premises contact centre software, to a contemporary and comprehensive provider of contact centre and workforce optimisation solutions in the cloud,” said Stew Bloom, Aspect’s Chairman and CEO. “By resetting our capital structure and dramatically improving our balance sheet, we will be well-positioned to compete over the long-term while continuing to accelerate investments in our product and service capabilities.”

The transaction eliminates approximately $320 million of indebtedness and provides the company with a new runway to continue the major business transformation it started three years ago. Over this period, Aspect has invested $160M in acquisitions, technology agreements and partnerships that have resulted in the industry’s most comprehensive product portfolio. Aspect has a strong Income Statement with over $400M in revenue, $300M of which is recurring, and approximately $100M of EBITDA. Moreover, the company maintains $100M in Cloud revenue backlog, driven in part by new year-over-year bookings growth of over 20% in 2015.

Bloom added, “Importantly, it is business as usual for Aspect’s customers, partners and employees. Aspect will continue to operate with strong levels of liquidity during the reorganisation process.”

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