McDermott International, an energy contractor headquartered in Houston, Texas, announced in a press release this week that it is filing for a Chapter 11 bankruptcy as part of a restructuring strategy.
The plan includes the sale of its asset, Lummus Technology, to The Chatterjee Group and Rhône Group for $2.7 billion. The sale must be approved by a bankruptcy judge through an auction process, though.
Through the company's restructuring, McDermott will be able to eliminate $4.6 billion in debt, equitizing nearly all of the company's funded debt.
The decision is supported by two-thirds of its creditors, according to the company. McDermott expects to be delisted from the New York Stock Exchange within the next 10 days. The company plans to the restructuring process with a letter of credit financing and only $500 million left in debt.
The following are remarks from the McDermott President and Chief Executive Officer David Dickson: "The restructuring transaction, which has the full support from all of our funded creditors, including our unsecured bondholders, is further recognition of McDermott's fundamentally solid operating business and proven strategy," said Dickson. "Our record backlog, the majority of which has been booked in the last two years, and high rate of new project awards demonstrates our customers' continued confidence in our business, the demand for our skills and our long-term opportunities ahead."
Read the full announcement here.