Roughly a month after its stock plummeted in value by 75 percent, Houston oil field service company McDermott International has landed $1.7 billion in new capital.
In a Monday morning filing with the U.S. Securities and Exchange, McDermott entered into a credit deal with Barclays Bank, Crédit Agricole Corporate and Investment Bank and five other financial institutions.
Under the deal, McDermott immediately gained access to $650 million in cash and credit while the remaining funds will be disbursed in three more tranches scheduled to take place between Nov. 30 and March31, 2020.
Source: Houston Chronicle
“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,” McDermott CEO David Dickson said in a statement. “The agreement provides near-term liquidity for the company to manage working capital and provide performance guarantees on expected new awards.”
The finance deal comes five weeks after McDermott’s stock fell off a cliff. Traded under the stock ticker symbol MDR, shares of McDermott went from $5.88 per share to as low as $1.58 per share in September amid stock market rumors that the company had retained a Chapter 11 bankruptcy firm.
Since that time, McDermott announced that the company is seeking “strategic alternatives” that include possibly selling its Lummus Technology division, which specializes in technology for petrochemical plants and refineries. McDermott has walked back plans to sell the company’s industrial storage tank business but plans to move forward with the sale of its pipe fabrication business.
“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,” Dickson said.
Founded in 1923, McDermott provides design, engineering and construction services to petrochemical plants, liquefied natural gas plants and offshore oil and natural gas facilities.The company has more than 32,000 employees in 54 nations. The Houston company posted a $2.8 billion loss on $2.1 billion of revenue in 2018.
