Oilfield service company, McDermott International has recently confirmed plans to file for Chapter 11 bankruptcy. Sources close to the matter cite that McDermott would file a prepackaged restructuring plan at the United States Bankruptcy Court in Houston.

The restructuring plan, which has the backing of two-thirds of its creditors, would enable McDermott to receive over USD 2.8 billion in financing and reduce USD 4.6 billion of debt. As part of this restructuring plan, the company has decided to sell Lummus Technology to Rhône Group and The Chatterjee Group for USD 2.725 billion. However, this deal must be passed by a bankruptcy judge in the auction process.

David Dickson, CEO and President of McDermott, claims that the restructuring plan, which has the complete support from all of the company’s funded creditors involving unsecured bondholders, is a recognition of the company’s fundamentally strong operating business and proven strategy.

The company’s record backlog, most of which have been booked in the previous two years, and an elevated rate of new project awards demonstrates their customers' continued faith in the company’s business, the demand for its skills, and long-term opportunities in future.

As per sources, McDermott's recent announcement puts an end to four months of rumors that the company could file for bankruptcy. Market rumors about McDermott using the services of a restructuring advisory firm had badly impacted the company’s stock prices.

In September, shares of the company were trading USD 6 per share range but have fallen below USD 1 per share. McDermott got a delisting warning from the New York Stock Exchange to take shares back above USD 1 per share threshold.

About McDermott International

Established in 1923, the company offers design, engineering and construction services to LNG & petrochemical plants, as well as offshore natural gas and oil facilities. It has around 32,000 employees across 54 nations and has posted a USD 1.9 billion loss on USD2.1 billion of revenue in its third quarter.

Source Credit - https://www.chron.com/business/energy/article/McDermott-oil-field-company-files-bankruptcy-14991364.php