McDermott Announces Confirmation of Reorganization Plan
McDermott International announced that the U.S. Bankruptcy Court for the Southern District of Texas has confirmed the Company’s Plan of Reorganization and approved the sale of Lummus Technology to a joint partnership between The Chatterjee Group and Rhône Capital.
“With the support of our creditors, employees, customers and suppliers, we have been able to confirm our Plan of Reorganization less than two months after we initially filed for Chapter 11,” said David Dickson, President and Chief Executive Officer of McDermott. “This is a significant achievement and allows us to emerge in the near-term as a stronger, more competitive player, with a sustainable capital structure that matches the strength of our operating business. I would like to thank our customers, employees, suppliers, partners, lenders and advisors for their support during the process and continued confidence in our business.”
Under the terms of the Plan, McDermott will complete a comprehensive restructuring transaction (the “Transaction”) to de-lever its balance sheet and immediately position the Company for long-term growth. The Transaction will allow the Company to emerge with more cash on hand than debt, eliminating over $4.6 billion of debt.
The Company expects to emerge in the second quarter following the receipt of regulatory approval for the sale of Lummus Technology to the Joint Partnership. As announced on January 21, 2020, subsidiaries of McDermott entered into a share and asset purchase agreement (the “Agreement”) to sell Lummus Technology to the Joint Partnership, as the “stalking horse bidder,” for a base purchase price of $2.725 billion, subject to higher or otherwise better bids received through a court-supervised auction process.
Proceeds from the sale of Lummus Technology are expected to repay McDermott’s DIP financing in full, as well as fund emergence costs and provide cash to the balance sheet for long-term liquidity.
