Photo: Illustration; Source: McDermott

McDermott completes raising $560M in new funds

U.S. offshore engineering and construction services provider McDermott has completed the raising of around $560 million in new capital.

McDermott said on Tuesday that it secured $560 million in new capital provided through a series of transactions which was secured through commitments from certain existing lenders and shareholders.

The initial announcement regarding the raising of new capital was made public on 18 November 2020. Now, McDermott met all conditions necessary to close these transactions.

The company added that the $560 million in capital “strengthened its balance sheet and increased its liquidity to provide financial flexibility for continued strong project execution and pursuit of new opportunities”.

David Dickson, president and CEO of McDermott, said: “With the completion of the capital raise, McDermott has recapitalized its business with the support of its investors.

This additional capital solidifies our liquidity position and allows us to continue delivering superior project execution for our customers and pursue new growth opportunities.

We want to thank our investors for the confidence they have in McDermott and its business model and our customers for their continued support“.

It is worth reminding that McDermott was in dire financial straits early last year and it filed for Chapter 11 in January 2020. It had to reorganise and eliminate $4.6 billion of debt.

The company was able to complete its restructuring process by shedding nearly all of its debt with $2.4 billion in letter of credit capacity and $544 million of funded debt.

Exiting bankruptcy was enabled through the $2.7 billion sale of Lummus Technology to a joint partnership between Haldia Petrochemicals and Rhône Capital.

The proceeds from the Lummus sale repaid the debtor-in-possession financing in full, as well as fund emergence costs and provide cash to the balance sheet for long-term liquidity.

The U.S. Bankruptcy Court for the Southern District of Texas confirmed McDermott’s plan of reorganization and approved the sale of Lummus Technology in mid-March.