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McDermott inks financing agreement for up to $1.7B

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McDermott inks financing agreement for up to $1.7B

McDermott International Inc. signed a financing agreement with secured lenders for up to $1.7 billion in new financing.

McDermott will have immediate access to $650 million, composed of a $550 million term loan facility and $100 million through a letter of credit facility.

Proceeds will be used to finance working capital and support the issuance of required performance guarantees on new projects, according to an Oct. 21 news release from McDermott.

The company said it is still considering options for its technology arm Lummus Technology LLC. In September, McDermott announced it received unsolicited offers that valued the unit at more than $2.5 billion.

McDermott also said it is pursuing the sale process for the remaining part of its U.S. pipe fabrication business, while it terminated the sale process for its industrial storage tank business. The company earlier aimed to complete the sale of both businesses during the third quarter, saying they no longer fit with its long-term vision as a vertically integrated supplier based on a strategic review.

The company added it is withdrawing its previously stated guidance for 2019.

Kirkland & Ellis LLP is serving as legal counsel to McDermott for the new financing and related matters, while Evercore is serving as financial adviser. AlixPartners LLP affiliate AP Services LLC is also serving as operational adviser and Barclays is acting as lead arranger on the financing.