US's McDermott granted access to $350m in additional financing

Firm will receive $250m (AED918.3m) term loan facility and a $100m (AED367.3m) letter of credit facility

US's McDermott granted access to $350m in additional financing. [representational image]
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US's McDermott granted access to $350m in additional financing. [representational image]

US engineering and contracting giant McDermott announced that it has been granted access to the second tranche – Tranche B – of the $1.7bn (AED6.2bn) additional financing, which will see the firm receive $350m (AED1.28bn), including a $250m (AED918.3m) term loan facility and a $100m (AED367.3m) letter of credit facility.

The company said in a statement that it intends to use the additional funds to continue financing working capital and support the issuance of required performance guarantees on new projects.

Construction Week reported in October 2019 that McDermott had inked an agreement with secured lenders to access to $1.7bn (AED6.2bn) in additional financing. At the time, the firm was granted immediate access to $650m (AED2.37bn), with the remaining amount of financing subject to the discretion of the lenders.

The Tranche B funding is expected to allow McDermott to continue collaborative discussions regarding a long-term balance sheet solution.

In connection with the Tranche B funding, the lenders have decided on amendments to the agreement that would waive certain conditions, and modify cross-default provisions in order to facilitate the Tranche B funding.

McDermott continues to pursue strategic alternatives process for Lummus Technology.

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