HOUSTON, Oct. 21, 2019 /PRNewswire/ -- McDermott
International, Inc. (NYSE: MDR) (collectively with its
subsidiaries, the "Company") today announced that it has entered
into an agreement (the "Agreement") with certain of its secured
lenders (the "Lenders") under which the Company will have access to
up to $1.7 billion of additional
financing, including letter of credit capacity. Under the terms of
the Agreement, McDermott will have immediate access to $650 million of financing comprised of
$550 million under a term loan
facility and $100 million under a
letter of credit facility, before reduction for related transaction
fees and expenses.
The Company expects to utilize the amounts available under the
Agreement to finance working capital and support the issuance of
required performance guarantees on new projects.
"This new credit agreement is a continued signal from our
lenders that they support McDermott, our underlying business,
growth strategy and ability to achieve a long-term balance sheet
solution," said David Dickson,
President and Chief Executive Officer of McDermott. "The Agreement
provides near-term liquidity for the Company to manage working
capital and provide performance guarantees on expected new awards.
We remain focused on serving our customers' needs, supporting our
dedicated employees and maintaining our valued relationships with
our subcontractors, suppliers and other business counterparties,
all as part of our efforts to enhance our position as a premier,
fully integrated provider of technology, engineering and
construction solutions to the energy industry."
McDermott continues to pursue the previously announced strategic
alternatives process for Lummus Technology and the sale process for
the remaining portion of the pipe fabrication business. McDermott
has decided to terminate its previously announced sale process for
its industrial storage tank business.
The Company's ability to access the remaining amount of
financing under the Agreement is subject to various conditions that
are at the discretion of the Lenders. Those conditions are detailed
in the Form 8-K that the Company filed with the U.S. Securities and
Exchange Commission today (the "Form 8-K").
McDermott also announced that it is withdrawing its previously
stated guidance for full-year 2019. Separately, the presentation
material used by the Company in discussions with the Lenders
regarding the new financing is included as an exhibit to the Form
8-K.
Kirkland & Ellis LLP is serving as legal counsel to
McDermott in connection with the new financing and related matters,
Evercore is serving as financial advisor and AP Services, LLC, an
affiliate of AlixPartners, is serving as operational advisor.
Barclays is acting as lead arranger on the financing.
About McDermott
McDermott is a premier, fully
integrated provider of technology, engineering and construction
solutions to the energy industry. For more than a century,
customers have trusted McDermott to design and build end-to-end
infrastructure and technology solutions to transport and transform
oil and gas into the products the world needs today. Our
proprietary technologies, integrated expertise and comprehensive
solutions deliver certainty, innovation and added value to energy
projects around the world. Customers rely on McDermott to deliver
certainty to the most complex projects, from concept to
commissioning. It is called the "One McDermott Way." Operating in
over 54 countries, McDermott's locally focused and
globally-integrated resources include approximately 32,000
employees, a diversified fleet of specialty marine construction
vessels and fabrication facilities around the world. To learn more,
visit www.mcdermott.com.
Forward-Looking Statements
In accordance with the Safe
Harbor provisions of the Private Securities Litigation Reform Act
of 1995, McDermott cautions that statements in this press release
which are forward-looking, and provide other than historical
information, involve risks, contingencies and uncertainties that
may impact McDermott's actual results of operations. These
forward-looking statements include, among other things, statements
about: the expected use of credit available under the Agreement;
measures being taken with respect to the Company's capital
structure, balance sheet, liquidity and strategic transactions; and
satisfaction of conditions. Although we believe that the
expectations reflected in those forward-looking statements are
reasonable, we can give no assurance that those expectations will
prove to have been correct. Those statements are made by using
various underlying assumptions and are subject to numerous risks,
contingencies and uncertainties, including, among others: risks
attendant to ongoing negotiations with various third parties;
adverse changes in the markets in which we operate or credit
markets; our inability to successfully execute on contracts in
backlog; changes in project design or schedules; the availability
of qualified personnel; changes in the terms, scope or timing of
contracts; contract cancellations; change orders and other
modifications and actions by our customers and other business
counterparties; changes in industry norms; and adverse outcomes in
legal or other dispute resolution proceedings. If one or more of
these risks materialize, or if underlying assumptions prove
incorrect, actual results may vary materially from those expected.
For a more complete discussion of these and other risk factors,
please see McDermott's annual and quarterly filings with the
Securities and Exchange Commission, including its annual report on
Form 10-K for the year ended December 31,
2018 and subsequent quarterly reports on Form 10-Q. This
press release reflects management's views as of the date hereof.
Except to the extent required by applicable law, McDermott
undertakes no obligation to update or revise any forward-looking
statement.
Contacts:
Investor Relations
Scott
Lamb
Vice President, Investor Relations
+1 832 513 1068
Scott.Lamb@McDermott.com
Global Media Relations
Gentry Brann
Senior Vice President, Communications, Marketing and
Administration
+1 281 870 5269
Gentry.Brann@McDermott.com
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SOURCE McDermott International, Inc.