A federal bankruptcy court has confirmed McDermott International Inc.’s plan of reorganization, Rigzone reports.
The court also approved the sale of Lummus Technology to a partnership between The Chatterjee Group and Rhône Capital, with the proceeds repaying McDermott’s DIP financing in full as well as funding emergence costs and providing cash.
“With the support of our creditors, employees, customers and suppliers, we have been able to confirm our Plan of Reorganization less than two months after we initially filed for Chapter 11,” President and CEO David Dickson said in a statement. “This is a significant achievement and allows us to emerge in the near-term as a stronger, more competitive player, with a sustainable capital structure that matches the strength of our operating business.”
The company, which builds oil platforms and gas-export plants, reported in November a $1.9 billion loss for its third quarter, citing “unfavorable changes in cost estimates” for EPC work on Cameron, with losses also from work on the Freeport LNG project in Texas, various petrochemical and power plant projects and an offshore oil project for Mexico oil company Pemex.
McDermott had also disclosed it was being investigated by the U.S. Securities and Exchange Commission over the projected loss disclosures that it attributes to poor labor productivity, increased contractor and subcontractor costs at the project and schedule delays on the Cameron LNG project in Louisiana. The company says it is cooperating with the SEC probe.
McDermott also faces a U.S. Justice Department probe of alleged fraudulent invoices at a now-cancelled U.S. Energy Dept. project in South Carolina that is linked to CB&I and other site vendors. In 2018, McDermott completed a merger with Chicago Bridge & Iron, or CB&I, which had acquired the Baton Rouge-based Shaw Group five years earlier.
The restructuring will allow McDermott to eliminate over $4.6 billion of debt.