McDermott International is preparing to file for bankruptcy as soon as next week to address its more than $4bn debt load, according to Bloomberg sources.
The Texas-headquartered firm, which builds oil platforms and gas-export plants for energy producers, is negotiating a restructuring plan that could see its debt converted into equity with existing term-loan lenders getting the majority of the shares, said the sources.
Unsecured creditors would receive less than 10% of the equity along with warrants, Bloomberg sources said.
Representatives for McDermott and HPS declined to comment, the newswire said.
McDermott has faced pressure since September, when its stock and bonds plunged on news that it had hired turnaround advisers. The company has struggled to integrate its acquisition of Chicago Bridge & Iron Co. and clear a backlog of projects, shaving revenues.
McDermott has over 70 years’ experience in the Middle East, focused on upstream and downstream facilities, hydrocarbon processing technology, refrigerated vessels and pipe manufacturing.
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