Thread regarding McDermott International Inc. layoffs

What's up with this?!

https://www.wsj.com/articles/mcdermott-investors-lent-1-7-billion-without-knowing-of-sec-probe-11573603223
Nov. 12, 2019 7:00 pm ET
McDermott International Inc. investors knew they were investing in a faltering business when they extended $1.7 billion in rescue financing last month. They didn’t know the oil-and-gas engineering company had been notified it was under Securities and Exchange Commission investigation.

McDermott didn’t tell investors about the SEC’s investigation until after the ink had dried on the financing deal, believing the probe wouldn’t have a “material adverse effect” on the company and didn’t need to be disclosed, a person familiar with the matter said.

But the Houston-based company’s disclosure of the probe last week has aggravated a number of lenders who were unaware of it when they agreed to invest, according to another person familiar.

McDermott needed the money because of a series of operational setbacks and a depressed offshore drilling sector. The company has been negotiating with creditors on how to fix its balance sheet and had hired law firm Kirkland & Ellis LLP to advise it on debt restructuring options.

Lenders who provided the rescue financing, which will be disbursed in four tranches if McDermott fulfills certain conditions, are represented by law firm Davis Polk & Wardwell LLP and financial adviser Centerview Partners LLC. The company unveiled the loan package, which was arranged by Barclays PLC, on the same day that it disclosed an almost 35% drop in projected 2019 earnings, sparking wild swings in prices on McDermott bonds.

Two weeks later, McDermott filed a third-quarter earnings report in which it disclosed it had received a letter and subpoenas from the SEC in July notifying the company it was being investigated over disclosures about projected losses surrounding a Louisiana liquefied natural gas project. The facility, known as Cameron LNG, is being built as a joint venture between McDermott and Japan’s Chiyoda Corp.

In securities filings, McDermott has cited poor labor productivity and increases in contractor and subcontractor costs at the project and has pushed back its projected timeline.

The company has been and intends to continue cooperating with the SEC in the investigation, including by producing requested documents, according to the latest quarterly report.

McDermott also last week said it opted to skip an interest payment owed to bondholders and was continuing efforts to sell its Lummus Technology division, which it previously said had been valued by potential buyers at more than $2.5 billion.

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Post ID: @120kJhZJ

8 replies (most recent on top)

Does the SEC believe the claims have merit? Do the banks think the disclosure is relevant, regardless of merit?

The issue is not whether the claims are true. They are past events and the investigation won't be resolved until after this critical period. The issue is whether the banks are p-ss-d. How does it affect the bargaining?

Still, I put the blame on the banks. There were quarter after quarter of surprises, followed by assurances coming within the time frame that new information about the next quarter's losses COULD have been in hand. Investigation or not, this issue was lurking out there if you were awake.

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Post ID: @120kJhZJ-2izn

McDermott are confident?
Not often we hear that....

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Post ID: @120kJhZJ-1fmu

The investigation was unnecessary. The company believes claims otherwise have no merit. McDermott are confident that no wrongdoing has occurred.

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Post ID: @120kJhZJ-1zyg

Well, this should make negotiations with the banks productive!

Remember that press photo for Cameron or Freeport or whatever other project we were f—ing up at the time? The customers are all grins. On the right is the Chiyoda stooge, livid (if that was possible-HA!) You can see him shaking with fury, almost like he's in an iPhone X snap. DD is sitting awkwardly with his hands folded, almost wincing. Not so Dashing & Debonair when he's one karate chop away from losing that rug he's wearing.

Now imagine either DD or Patsy across the table from the banks. The banks just found out that there is an SEC probe and THEN we decide not to pay them. DD's not so smug, not so self assured when he's leaking diarrhea in his $8000 suit. No wonder they got rid of A– Clown #2 and brought in Rent-a-Exec to step in and clean up DD's mess.

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Post ID: @120kJhZJ-1dlw

McDermott response?

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Post ID: @120kJhZJ-1aic

One Mcdermott way sounds familiar. We called it the one CBI way. Then were brainwashed with a new type of company.

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Post ID: @120kJhZJ-pgq

Another nail in the coffin.

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Post ID: @120kJhZJ-fbm

The One Mcdermott Way in all of its glory. How is DD still there?

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Post ID: @120kJhZJ-hqt

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