McDermott International enters into agreement for up to $1.7 bln of new financing
McDermott International, Inc. has entered into an agreement with certain of its secured lenders under which the Company will have access to up to $1.7 billion of additional financing, including letter of credit capacity, the company said in its release. 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.
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.
