Irish-domiciled multinational oil and natural gas service company Weatherford International has entered into an agreement with its top creditors that will allow the company to file for a "prepackaged" Chapter 11 bankruptcy - after more than four years without making a profit.
Weatherford expects to implement the Restructuring Agreement through a "pre-packaged" Chapter 11 process and expects to file U.S. chapter 11 and Irish examinership proceedings.
As part of this process, Weatherford intends to continue engaging in discussions with, and begin soliciting votes from, its creditors in connection with a proposed Plan of Reorganization prior to filing.
It has executed a restructuring support agreement with a group of its senior noteholders that collectively holds or controls approximately 62% of the Company's senior unsecured notes. The proposed comprehensive financial restructuring would significantly reduce the Company's long-term debt and related interest costs, provide access to additional financing and establish a more sustainable capital structure.
"During the past year, we have been executing a company-wide transformation to fundamentally improve the way we operate our business and to strengthen Weatherford for the long run," said Mark A. McCollum, President and CEO of Weatherford.
Under the terms of the Restructuring Agreement, the Company's unsecured noteholders would exchange approximately $7.4 billion of senior unsecured notes for approximately 99% of the equity in the Company and $1.25 billion of new tranche B senior unsecured notes.
The Restructuring Agreement contemplates that Weatherford will receive commitments for approximately $1.75 billion in the form of debtor-in-possession (DIP) financing comprised of an approximately $1.0 billion DIP term loan that would be fully backstopped by certain members of the Ad Hoc Noteholder Group and an undrawn $750 million revolving credit facility provided by certain of Weatherford's bank lenders, which would be available as part of the chapter 11 process and be led by Citigroup subject to conditions to be agreed.
Subscribe
