Troubled oilfield services firm McDermott International says it has entered into an agreement with certain of its secured lenders under which the company will have access to up to US$1.7 billion of additional financing, including letter of credit (L/C) capacity.

Under the terms of the agreement, the Houston-based multinational will have immediate access to US$650 million of financing comprised of US$550 million under a term loan facility and US$100 million under an L/C facility.

The company expects to utilise the funds to finance working capital and support the issuance of required performance guarantees on new projects.

Liquidity provided

"The agreement provides near-term liquidity for the company to manage working capital and provide performance guarantees on expected new awards," according to president and CEO of McDermott, David Dickson.

He describes the rescue package as a "continued signal from our lenders that they support McDermott, our underlying business, growth strategy and ability to achieve a long-term balance sheet solution."

Asset sale

McDermott is also selling assets to ease its financial woes. It is hoping to sell its pipe fabrication business.

But the company has shelved plans to sell its industrial storage tank business.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.