Report: McDermott may file for bankruptcy as soon as next week

U.S. engineering and construction services company McDermott International could be filing for bankruptcy over the course of this week.

Image source: McDermott

Citing people close to the matter, Bloomberg stated the company was looking into a restructuring plan to convert its more than $4 billion debt into equity.

According to the news agency, the majority of the shares will be owned by a group of lenders. Unsecured creditors are set to receive less than ten percent of the equity.

The restructuring is still under negotiation and could change, with Baupost Group and HPS Investment Partners reported as potential providers of a $2 billion bankruptcy loan.

It is worth saying that McDermott entered into an agreement with lenders back in October 2019 under which the company was supposed to gain access to up to $1.7 billion of additional financing, including a letter of credit capacity. The company eventually gained access to part of the financing sum but the relief period expired on January 15.

In an attempt to raise equity, McDermott put its Lummus Technology business up for sale. The company received offers to sell Lummus in September 2019 at which time McDermott stated that the received offers for its subsidiary were in the region of $2.5 billion.

Offshore Energy Today Staff

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