TechnipFMC to Offer $850mn in Notes
Franco-American oil services group TechnipFMC plans to offer $850mn in senior unsecured notes due 2026, as it pushes ahead with plans to split itself into two separate companies.
Proceeds from the private offering will be used to settle TechnipFMC's debts, cover spin-off fees and expenses and boost working capital, TechnipFMC explained in a statement.
The company, formed in 2016 as the world's only fully integrated subsea provider through the merger of Technip and FMC Technologies, took a decision to separate in August 2019. The plan is to transfer its engineering and construction activities to a newly-formed Technip Energies, while keeping its technology and services business under the TechnipFMC name.
The process had been due to wrap up sooner, but was put on hold following the March oil price collapse.
TechnipFMC now aims to complete the separation in the current quarter. But if the spin-off is called off or delayed beyond July 31, 2021, the company will have to redeem the notes and settle any accrued interest.
Under the separation terms, current shareholders in TechnipFMC will get 50.1% of stock in Technip Energies on a pro-rate basis. TechnipFMC will keep the rest initially, but intends to divest the shares "over time." BpiFrance, already a major TechnipFMC investor, will become a significant shareholder in Technip Energies through a $200mn investment.
Announcing that the separation process was back on track earlier this month, TechnipFMC CEO Doug Pferdehirt said the separated companies would be “poised to capitalise on the energy transition. The increased clarity we now have in the market outlook coupled with our demonstrated ability to successfully execute projects in this most challenging period give us confidence to move forward with the separation."