Babcock & Wilcox Enterprises (B&W), has announced a new financing package that includes a substantial letter of credit (L/C) facility as the troubled US industrial boilermaker pursues its turnaround strategy.

Last year B&W announced a comprehensive debt refinancing agreement that provided a US$200 million commitment to fully refinance the existing revolving credit facility with an additional US$30 million to support the company's growth along with improved L/C availability (DC World News, 6 March 2020).

L/C arrangements

In the new financing package entered into with PNC Bank and an affiliate of MSD Partners, PNC has provided an up to US$50 million asset-based revolving credit facility and availability for up to US$125 million of L/Cs to B&W.

MSD Partners will provide cash collateral to support the L/C availability. The financing agreements have a maturity date of 30 June 2025.

Turnround strategy

The company's turnaround strategy includes investment in renewable, environmental, thermal and decarbonisation technologies and the evaluation of potential acquisitions.

The new senior facility will directly support new projects this year and ongoing projects as B&W strives to improve the strength of its balance sheet.

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