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McDermott gets support for restructuring deal, to file Chapter 11 reorganization

McDermott International Inc. on Jan. 21 said it received the support of over two-thirds of its funded debt creditors for a restructuring deal that would eliminate more than $4.6 billion of the company's debt.

The restructuring deal will be executed under a prepackaged Chapter 11 reorganization plan, which McDermott plans to file on the same day with the U.S. Bankruptcy Court for the Southern District of Texas, according to a news release. The restructuring deal will be supported by a $2.81 billion debtor-in-possession financing facility. The facility, along with the company's cash, is expected to balance McDermott's cash flows and continue its operations.

McDermott also secured a committed exit financing amounting to more than $2.4 billion of credit facility. The company expects it will have roughly $500 million of funded debt after it emerges from the Chapter 11 process.

In line with the company's restructuring deal, McDermott's subsidiaries also entered into a share and asset purchase agreement with a joint partnership between investment firm The Chatterjee Group and Rhône Group LLC, according to the release. The joint partnership will also act as the "stalking-horse bidder" for the sale of McDermott's business Lummus Technology LLC.

Under the purchase agreement, the joint partnership has agreed to acquire Lummus Technology for $2.73 billion. However, McDermott said that it plans to hold an auction within 45 days to look for higher bids for the technology business.

McDermott said it plans to use the proceeds from the sale of Lummus Technology for the repayment of the debtor-in-possession financing facility.

In addition, the oilfield services provider said it expects to be delisted from the New York Stock Exchange within the next 10 days, following the Chapter 11 filing.