If McDermott does file bankruptcy, what will happen to this big Cameron job about to kick off?
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Anyone knows what's going on? The 30-day grace period nears its end, and the company appointed Arcadi Jackson's lawyer and Alan Carr to the board.
Post ID: @126Tu0jO-1nlr two posts below is telling the whole truth. He seems to be a current employee. Thanks guy.... I always claimed DD didn't know offshore. Someone, albeit late, agrees with me, Banks are not gullible, except they have hungry managers who pocket fees and bonuses and turn around and sell the note to the next unsuspecting id–t. There is too much almost free money in the world today. Projects will either have to find new EPC companies or have to rethink and refinance the existing projects. BK judge will make the final decision. DD and his aparatchik will be out. Salaries cut. Reorg over reorg. Tough 3-4 years,
Mdr will ultimately be in control here and they will finish all outstanding projects
Post ID: @11GYQZlV says MDR is making concrete plans for bankruptcy. Bloomberg said the new loan looks like it could be converted to debtor in possession financing. If MDR declares bk it will submit a plan of reorganization. If it doesn't declare bk, the credible threat of bk is leverage in renegotiating debt. Likely, the banks won't break off productive pre-bk negotiations just because the clock runs down.
But MDR owes a lot of people a lot of money. The proposed asset sales aren't enough to get the co out of their hole. And no bank would be dumb enough to refinance everything with longer terns and lower interest.
Or are they?
Face it, the investment community has been amazingly gullible, apparently almost as infatuated with our Anthony-Hopkins-doppelganger-CEO as he is with himself. Only recently waking up to a slowly-then-suddenly deteriorating financial situation that we saw from miles away. And if refinancing keeps the banks from having to writeoff loans, who knows, they might go for it.
But seriously, what's left after breaking off the steady earners and selling them for a payday loan? Is a bank going to bank on Offshore and LNG? Offshore is smoke and mirrors, fat MENA petrodollars masking half assed money losing projects everywhere else.
And our only problems with LNG are that we lose most of them and lose money on all of them. Except Gorgon. Yeah, try to get Chevron to hire us again. I guess all we need is to convince oilcos to pay us more. Not too hard when oil prices are just above breakeven, right? And US shale maybe is about to fizzle. And we can't stay in budget. Ever.
Chiyoda was a LEADER in LNG engineering in Qatar...and then they met us. Let's just say I'm not expecting the ousted CEO to send DD a Mari Kurisumasu card any time soon.
Mngt doesn't understand Onshore. And other posts here have made the case that mngt doesn't understand Offshore.
So will the banks go for it? Yeah, probably. Because they are still pathetically gullible. But management will be completely replaced. Good for us! I just want to be there when DD and former Tonight Show host Lispy get thrown to the curb. And Campbell's sister. And her little dog too. But there will be severance checks waiting in the gutter for them to stuff into their pockets. (A–holes.)
If you've never worked for a company that was bootstrapped and taken private, or bought out like APTIM, or in bk or post-bk, it really s—s. The quality of projects is bad, the workers are demoralized, money is tight.
Start making some concrete plans of your own for MDR's bk.
Cameron was the primary reason that McDermott (formerly CB&I) is in deep trouble. CB&I actually bought the job in order to leverage and establish a strong LNG track record along side Freeport, Mozambique, Elba and others. To attempt to pull it off, they threw in with Chiyoda to maintain credibility during the engineering stages. However, at the end of the day, they only planned to lose about a billion. However, they never forsaw the difficulties of construction imposed by building on a swamp accessible by only a two lane road (one lane each direction) in an area prone to heavy year-round rainfall and fog with very inferior construction and site management.
Were Trains 4 and 5 awarded? There's not enough money to finish Trains 2 and 3, so we'll need another loan or to file chapter 11.
Stewie cut a fine jib, but couldn't do math to save his life. DD has an eye for talent!
I suspect the contract has some sort of clause covering cancellation by either party. Generally it is the cost of the work completed plus some sort of penalty if canceled by the client. It is not unusual for contractors to work and complete projects during CH 11, if it comes to that.
How does that work? The contract is an asset of the company. Is there something unusual about an EPC contract that allows the customer to just pull it?