McDermott To Begin Chapter 11 Process; Agrees To Sell Lummus Technology
(RTTNews) - McDermott International, Inc. (MDR), a provider of technology, engineering and construction solutions to the energy industry, said the company intends to commence the prepackaged Chapter 11 filing in a U.S. Bankruptcy Court on Tuesday. The process will be financed by a debtor-in-possession financing facility of $2.81 billion.
Also, subsidiaries of McDermott have reached an agreement with a joint partnership between The Chatterjee Group and Rhône Group, under which the joint partnership is committed to acquire Lummus Technology for a base purchase price of $2.725 billion. McDermott plans to use the proceeds from the sale of Lummus to repay the DIP financing in full, as well as fund emergence costs. McDermott said it has secured committed exit financing of over $2.4 billion in letter of credit facility capacity and will emerge from Chapter 11 with approximately $500 million in funded debt. "As a result of the transaction, we are eliminating over $4.6 billion in debt from our balance sheet and we will emerge with robust liquidity and significant financing. Throughout this process, McDermott will continue all business operations as normal," said David Dickson, CEO of McDermott.
The company expects to be delisted from the NYSE within the next 10 days. Its common stock will continue to trade in the over-the-counter marketplace throughout the process.
Shares of McDermott International, Inc. were down 14% in pre-market trade on Tuesday.
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