LNG

McDermott International, the LNG and energy engineering company, has finalized $560 million in new capital through a series of transactions just a year after filing for Chapter 11 bankruptcy protection.

McDermott International, the LNG and energy engineering company, has secured around $560 million in new capital through a series of transactions expected to close by the end of 2020, just a year after filing for Chapter 11 bankruptcy protection.

McDermott has secured commitments from certain existing lenders and shareholders for these transactions, as well as approval from a steering committee comprised of certain existing letter of credit and term loan lenders.

“The transactions are designed to further strengthen the company's balance sheet, increase liquidity and fund future growth opportunities,” said McDermott.

The Houston, Texas-based company said the support reflected their confidence in the long-term business strategy and competitive position.

Analysts noted that many companies in the US and global oil and gas sector have experienced difficulties in the past year, though McDermott's problems were essentially caused by an ill-timed take-over deal.

McDermott is involved in some of the world’s leading LNG construction projects, including on the US Gulf Coast and the North Field Expansion in Qatar and at Ichthys LNG in Australia.

McDermott has additionally been engaged as a contractor on the Golden Pass LNG export project for Qatar Petroleum and ExxonMobil.

“Following on the heels of a successful restructuring earlier this year, this additional capital will further solidify our liquidity position, enabling us to continue to deliver superior project execution for our customers and consistently pursue new growth opportunities as demand for our expertise and capabilities increases,” said
David Dickson, President and Chief Executive of McDermott.

Kirkland and Ellis LLP is serving as legal counsel to McDermott, AP Services, LLC, an affiliate of AlixPartners, is serving as operational advisor and Centerview Partners is serving as the company's financial advisor.

McDermott first received approval for a comprehensive restructuring plan in January 2020, supported by more than two-thirds of all its funded debt creditors.

The equity-for-debt plan eliminated more than $4.6 billion of McDermott’s debt.

The restructuring was implemented through a pre-packaged Chapter 11 process.

The process resulted in a comprehensive balance sheet restructuring and transformed into equity nearly all of McDermott's funded debt.

The company had suffered financial problems since it completed the $6Bln deal in 2018 to buy LNG rival engineering, procurement and construction company Chicago Bridge & Iron (CB&I).

The restructuring transaction managed to strengthen its balance sheet and normalize its trade debt.

All of McDermott's businesses operated as normal during the restructuring.

McDermott also completed the sale of Lummus Technology to a joint partnership between Haldia Petrochemicals, a flagship company of The Chatterjee Group, and equity fund Rhone Capital, having received all required regulatory approvals under the reorganization.

McDermott emerged from the crisis with a newly constituted board of directors.

McDermott International, one of the leading US LNG and energy project contractors, has successfully completed its restructuring process several months after plunging into Chapter 11 bankruptcy status and later emerging with assets sales to raise cash and re-assure creditors.

McDermott International, the US energy and LNG engineering company, said that first gas had flowed from a field development of India's Oil and Natural Gas Corp. (ONGC) in the offshore Krishna Godavari Basin in the Bay of Bengal.

McDermott was awarded the offshore contract for ONGC’s 98/2 Block in the KG Basin in October 2018.

The KG 98/2 block is situated offshore the Godavari River delta, about 35 kilometres off the East Coast state of Andhra Pradesh and extends for 7,290 square kilometres in water depths ranging from 300 metres to 3,200 metres.

It is currently one of the largest subsea projects in India and included the supply of a package including production systems (SPS), including 26 deepwater trees, and the installation of subsea umbilicals, risers and flowlines.

The early first gas involved the tie-back of a single well to the existing Vashishta facility.

At 4,265 feet (1,300 metres), the first well that has been opened for early first gas is the deepest water depth opened by ONGC.

The ONGC gas field will further help satisfy India's growing natural gas demand, about half of which is made up of domestic pipeline gas supplies from areas like the KG Basin, wile the other half comes from LNG imports.

“McDermott is a leader in the subsea space and we have worked incredibly hard to fast-track the production to early first gas,” said Ian Prescott, McDermott's Senior Vice President for Asia Pacific.

“To deliver this accelerated schedule is an exceptional achievement and testament to the benefits of the collaborative commercial model put forward to ONGC,” Prescott explained.

“Production from a deepwater well in less than 14 months is an outstanding achievement for the exploration and production industry,” he stated.

McDermott said that in line with the “Made in India' approach for the 98/2 project, a substantial amount of engineering and project management has been led from McDermott's operations in Chennai.

“This local approach is a new initiative in the deepwater subsea space for McDermott,” said the Houston-based company.

“We look forward to continuing our work in the Bay of Bengal as we help ONGC meet India's growing energy demands,” it added.

McDermott has been conducting business as usual while having to ease its financial concerns in mid-March when a US bankruptcy court in Texas approved the sale of its Lummus Technology business to global equity funds.

Under the terms of the Chapter 11 plan, McDermott will complete a comprehensive restructuring forced on it by financial problems, including those that arose from takeover of CB&I.

McDermott is involved in some of the world’s leading LNG construction projects, including several on the US Gulf Coast and the North Field Expansion in Qatar.

Currently McDermott is working with other firms on both the Cameron LNG project at Hackberry in Louisiana and the Freeport export facility at Quintana Island in Texas.

McDermott has additionally been engaged as a contractor on the Golden Pass LNG export project for Qatar Petroleum and ExxonMobil venture in Texas.

McDermott International, the US LNG and energy engineering company, is set to emerge from Chapter 11 bankruptcy protection after the US Bankruptcy Court for the Southern District of Texas approved the sale of its Lummus Technology business to New York equity funds.

McDermott International, the energy and LNG engineering company, reported progress on three US LNG export projects and with other orders pending as it also registered third-quarter losses of $1.9 billion in the midst of a corporate overhaul and asset sales.

McDermott International, the US energy and LNG project contractor, said it had entered into an agreement with lenders for access to up to $1.7 billion of additional financing, including letters of credit as it embarks on a company overhaul to regain profitability.

McDermott International, said it had received unsolicited approaches to sell all or part of its Lummus Technology business with a valuation exceeding $2.5 billion and analysts said this could be the starting point for a corporate overhaul.