Posted on September 13, 2023
Houston-based offshore contractor McDermott has reached an agreement with its creditors and stakeholders on a restructuring plan that will push out debt maturities and deliver a new cash injection.
The company has secured backing from most of its key creditors to extend repayment deadlines on its letter of credit facility and term loans to 2027.
Existing equity holders have also agreed to inject $250m of fresh capital into McDermott, which is expected to support the company’s ability to operate its business, deliver on existing projects and expand its backlog with new projects.
To implement the deal, McDermott will begin in-court restructuring proceedings in the Netherlands and UK for its affiliates, with completion expected no later than early 2024.
Michael McKelvy, president and CEO of McDermott, said the company intends to continue all operations as normal as it moves through these processes, including continued delivery on client projects.
“We are pleased to have reached this agreement with our key stakeholders, which demonstrates their confidence in the long-term strength and sustainability of our business. These proactive steps ensure that McDermott is strongly positioned to deliver on our growing number of client projects as we continue our important work of accelerating the energy transition in our industry,” added McKelvy.
In addition to debt restructuring, the company said it plans to discharge certain unsecured claims associated with legal matters related to the Refineria de Cartagena project, which was originated by CB&I before McDermott’s acquisition in 2018. The two unsecured claims consist of an arbitration decision issued by the International Chamber of Commerce in favor of Reficar and an in-country order of Colombia’s Contraloría General de la República.
“McDermott opposes each claim on the merits; the company strongly disagrees with and has petitioned to vacate the decision of the ICC and is engaged in arbitration and in-country proceedings to challenge the Contraloría action as improper and without jurisdiction over the company,” McDermott said in a release.