(Reuters) - Oilfield services provider McDermott International Inc MDR.N is in talks with lenders to file for bankruptcy within weeks, the Wall Street Journal reported on Monday, citing people familiar with the matter.
A group of lenders led by HPS Investment Partners and Baupost Group LLC are in talks to provide a loan of around $2 billion to keep the company’s operations running during bankruptcy, according to the report.
McDermott, whose shares were down 45.7% at $0.76, declined to comment.
The bankruptcy financing will help the company provide letters of credit, which are crucial for the company to continue financing projects, the Journal reported.
Most of McDermott’s letters of credit expire within a year and need to be renewed for the company to continue its work on projects, the newspaper said.
McDermott will continue to pursue a sale process for its Lummus Technology unit in bankruptcy, as part of its restructuring plan, according to the report.
Earlier in September, the company received takeover interests for all or part of the business that could value the unit at over $2.5 billion.
Reporting by Shradha Singh in Bengaluru; Editing by Shounak Dasgupta