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Kanata-based tech mainstay Mitel files for bankruptcy protection in U.S.

March 10, 2025

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Ottawa-based Mitel Networks has filed for bankruptcy protection in the United States as the unified communications service provider looks to recapitalize its debt. Mitel filed for Chapter 11 bankruptcy protection in the Southern District Court of Texas, the company announced Sunday. Mitel's Canadian entity is also seeking recognition of the U.S. proceedings under Canada's Companies' Creditors Arrangement Act. Mitel said its operations outside of the U.S., Canada and certain business segments in the United Kingdom are not included within the Chapter 11 filing. The company said its global business “will continue to operate in its normal course.” Mitel’s move to file for bankruptcy comes just over 18 months after it acquired European telecom giant Unify in October 2023. Mitel said last year it served in excess of 75 million users – more than double its total of about 35 million before the acquisition – in 100-plus countries. In a news release Sunday, Mitel said it has entered into an agreement with a group of senior lenders, certain junior lenders and other investors to recapitalize its debt. The company said it has received a commitment for $60 million of new money debtor-in-possession financing from some of the lenders to help fund its day-to-day operations as it goes through the restructuring process. In addition, Mitel said it has received a commitment for $64.5 million in new exit financing once the process is complete. It said the plan will result in its balance sheet being “deleveraged” by about US$1.15 billion and will reduce its annual cash interest expense by around US$135 million. “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,” Mitel chief executive Tarun Loomba said in a statement. A Mitel spokesperson said company officials would not be available for interviews on Monday. In its news release on Sunday, Mitel said it will continue to “invest in its long-term business strategy” as it looks to grab a bigger share of a global unified communications sector that was valued at more than US$113 billion last year and is expected to grow at least another 17 per cent by the end of the decade, according to Forbes. Founded by entrepreneurs Terry Matthews and Michael Cowpland in 1973, Mitel was acquired by private equity firm Searchlight Capital Partners for US $2 billion and taken private in 2018. While the firm is still headquartered in Kanata, all but about 300 of its more than 5,400 employees were located outside of the National Capital Region as of 2024.