Weatherford: Enters Voluntary Chapter 11 Bankruptcy – Reducing Debt by $5.8bn
Financial Restructuring Implemented through “Pre-Packaged” Chapter 11 Process Will Reduce Company’s Long-Term Debt by More Than $5.8 Billion
Proposed Restructuring Contemplates $1.75 Billion in New Financing and up to $1.25 Billion in Additional Post-Emergence Financing
Weatherford Operations Are Continuing Without Interruption and With No Expected Impact on Customers, Vendors, Partners or Employees
Weatherford International plc, Weatherford International Ltd., and Weatherford International, LLC (collectively, “Weatherford” or the “Company”) announced today that the Company has initiated its previously-announced financial restructuring by commencing voluntary cases under chapter 11 of the U.S. Bankruptcy Code to effectuate its “pre-packaged” Plan of Reorganization (the “Chapter 11 Cases”). The Company’s other entities and affiliates are not included in the Chapter 11 Cases. Weatherford also expects to file Bermuda and Irish examinership proceedings (collectively with the Chapter 11 Cases, the “Cases”) in the coming months. The 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.
The Company has received commitments from lenders for $1.75 billion of debtor-in-possession financing (the “DIP Facility”). The proceeds of the DIP Facility will be available to fund the Company’s working capital needs throughout the Cases. Additionally, upon exit from bankruptcy the Company will have access to additional financing in the form of (a) an undrawn first lien exit revolving credit facility in the principal amount of up to $1.0 billion, and (b) up to $1.25 billion of new tranche A senior unsecured notes with a five-year maturity. In addition, on emergence from bankruptcy the Company will issue $1.25 billion of new tranche B senior unsecured notes with a seven-year maturity to holders of the Company’s existing unsecured notes.
BUSINESS AS USUAL
The Company has filed “first day” motions to obtain the requisite court authority for the Company to continue operating its businesses and facilities in the ordinary course without disruption to its customers, vendors, partners or employees. The Company is working to complete all necessary milestones and will disclose details regarding planned emergence in due course.
Lazard is acting as financial advisor for the Company, Latham & Watkins, LLP as legal counsel, and Alvarez & Marsal as restructuring advisor. Evercore is acting as financial advisor for the group of the Company’s senior noteholders and Akin Gump Strauss Hauer & Feld LLP as legal counsel.
