Support from a majority of existing lenders and $124.5 million in new financing will increase liquidity to optimize business operations and capitalize on the hybrid communications market opportunity

Balance sheet to be deleveraged by approximately $1.15 billion and annual cash interest expense to be reduced by approximately $135 million

Company to continue to provide global market-leading flexible and secure communication and collaboration solutions to customers; operations to continue in the ordinary course

Vendors expected to be paid in full

Mitel Takes Action to Optimize Capital Structure, Positioning the Business for Efficient Growth and Long-term Sustainability

Media Contact:
pr@mitel.com

Rachel Chesley / Diana Sangiorgio
MitelCommunications@fticonsulting.com

Mitel Networks Corporation, (“Mitel” or “the Company”), a global leader in business communications, today announced it has entered into an agreement with an ad hoc group of its senior lenders (the “Ad Hoc Group”), certain junior lenders, and other key stakeholders to recapitalize its debt in a manner that best positions the Company to optimize its global operations and drive profitable and predictable growth.

Right-sizing Mitel’s capital structure will enable the Company to invest in its long-term business strategy as it looks to be the leader in unified communications, addressing the increased demand for hybrid communications solutions by new and existing enterprise customers in the most demanding industries and geographies, while also continuing to support more than 70 million users with customers in over 100 countries.

Mitel will continue to operate in the ordinary course throughout its financial reorganization process, fulfilling its go-forward commitments to customers, partners, and other stakeholders. With support from the Ad Hoc Group and other key stakeholders, Mitel expects this to be a swift, streamlined process with minimal disruption to customers, employees, vendors, or partners.

“For over 50 years, Mitel has pioneered and adapted to the ever-changing communications industry, shaping how organizations worldwide connect and communicate,” said Tarun Loomba, Chief Executive Officer of Mitel. “We are confident the steps we are taking to optimize our capital structure will make us a stronger company primed for efficient and sustainable growth. Our strengthened capabilities at the end of this process will ensure our ability to continue to support customers and partners with innovative solutions, incorporating emerging technologies, and meeting their evolving needs for secure, reliable communications solutions for years to come. We look forward to becoming an even stronger vendor to our customers through this process, better positioned to power their most meaningful connections and to address the increasing preferences for hybrid communications solutions, globally.”

To implement the reorganization transaction, the Company and certain of its affiliates have commenced solicitation of a joint prepackaged plan of reorganization (the “Plan”) and filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. Mitel’s operations outside of the U.S., Canada, and select business segments in the U.K. are not included within the Chapter 11 filing. Mitel’s global business will continue to operate in its normal course.

Mitel has received a commitment for $60 million of new money debtor-in-possession ("DIP") financing from certain of the supporting lenders to further bolster the business through the restructuring process. Once approved by the Court, the DIP financing and Company’s existing working capital will provide liquidity to support day-to-day operations during the Chapter 11 process. Mitel has also received a commitment for $64.5 million of new exit financing upon consummation of the Plan to support the Company’s go-forward operations. This process will result in the Company’s balance sheet being deleveraged by approximately $1.15 billion and its annual cash interest expense to be reduced by approximately $135 million.

As part of the Chapter 11 process, the Company has sought expedited relief through customary motions to allow Mitel to maintain its operations in the ordinary course. Under the terms of the motions, employees would continue to be paid as usual and continue their benefits without disruption. Additionally, the Company has filed a motion with the Bankruptcy Court that will allow it to make timely payments to vendors, suppliers, and other trade partners in full under normal terms for goods and services delivered both before and after the filing date.

The Company is represented in this matter by Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal advisor, FTI Consulting, Inc. as financial advisor, and PJT Partners LP as investment banker. The Ad Hoc Group is advised by Davis Polk & Wardwell LLP as legal advisor and Perella Weinberg Partners LP as investment banker.

For more information about Mitel’s financial restructuring, visit www.mitel.com/about/financial-restructuring, cases.stretto.com/mitel or call (855) 704-1401 (U.S. and Canada); or (949) 570-9105 (International).

About Mitel

Mitel is a global leader in business communications, providing businesses with advanced communication, collaboration, and contact center solutions. With more than 70 million users across over 100 countries, Mitel empowers organizations to connect, communicate, and collaborate seamlessly, with the flexibility and choice they need to thrive, both now and for the future. Through proven experience and innovative solutions, Mitel delivers communications without compromise. For more information, go to www.mitel.com and follow us on LinkedIn and X @Mitel.

Mitel is the registered trademark of Mitel Networks Corporation.

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