US Court Confirms McDermott Reorganisation Plan
US Bankruptcy Court for the Southern District of Texas has confirmed McDermott International’s reorganisation plan and approved the $2.7bn sale of Lummus Technology to a joint partnership between Chatterjee Group and Rhone Capital, the engineering, construction and procurement company said late March 12.
"With the support of our creditors, employees, customers and suppliers, we have been able to confirm our plan of reorganisation less than two months after we initially filed for Chapter 11," said McDermott CEO David Dickson. "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."
Under the terms of the plan, McDermott will complete a comprehensive restructuring transaction to de-lever its balance sheet by eliminating almost $5bn of debt, leaving it in the black. It hopes to achieve this in Q2, following regulatory approval for the sale of Lummus Technology.
McDermott acquired Lummus in 2018 as part of its CB&I takeover. It is a licensor of gas processing, refining, petrochemical and coal gasification technologies, as well as a supplier of proprietary catalysts, equipment, and related engineering services.
Proceeds from the divestment of Lummus will be used to settle McDermott's debtor-in-possession financing, fund emergence costs and provide cash for its balance sheet, the company said. Among its current high-profile gas projects are the Qatar North Field expansion and Mozambique LNG.