McDermott International, the US energy and engineering company, said it had received approval for a comprehensive restructuring plan supported by more than two-thirds of all its funded debt creditors.
The equity-for-debt plan would eliminate more than $4.6 billion of McDermott’s debt.
The restructuring transaction will be implemented through a pre-packaged Chapter 11 process, which under US law gives protection from bankruptcy.
It will be financed by a debtor-in-possession (DIP) financing facility of $2.81 billion.
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.
“Subject to court approval, McDermott expects the DIP financing, combined with cash generated by McDermott, to enable the company to stabilize its cash flows, continue operating in the normal course and fulfil its commitments to key stakeholders, including customers, suppliers, joint-venture partners, business partners and employees,” stated the Houston-based company.
McDermott has additionally secured committed exit financing of over $2.4Bln in letter of credit facility capacity and will emerge from Chapter 11 with around $500 million in funded debt.