Dec 15 (Reuters) - IT firm Avaya Holdings Corp is reaching a chapter 11 bankruptcy filing to restructure its balance sheet, in a bid to turn around its business and move past accounting problems, the Wall Street Journal reported on Thursday.
The company did not immediately respond to a Reuters' request for comment.
Avaya had said there was substantial doubt about its ability to continue as a going concern in light of a debt maturity next year, as per the Journal's report, which cited people familiar with the matter.
Earlier this week, it said it was in talks with its financial stakeholders regarding a comprehensive resolution to strengthen its balance sheet.
One plan — supported by a senior lender group, including 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, the Journal reported.
Another plan, supported by holders of Avaya's unsecured bonds, proposes to restructure the company out of court, including by issuing new bonds and loans to retire some old debt, the report said.
Avaya's shares have fallen nearly 97% this year, crimping its market cap to around $45 million from more than $2 billion a year ago. (Reporting by Anirban Chakroborti and Eva Mathews in Bengaluru; editing by Uttaresh.V)