McDermott International Inc. said that it will file for chapter 11 protection yesterday, after succumbing to depressed conditions in the offshore drilling industry and setbacks in major energy projects, WSJ Pro Bankruptcy reported. The engineering firm said that it has reached an agreement with more than two-thirds of its creditors in a restructuring transaction that would eliminate more than $4.6 billion in debt. McDermott has obtained commitments for a $2.81 billion debtor-in-possession facility to fund its bankruptcy proceedings. The financing, subject to court approval, could enable the company to stabilize its cash flows, McDermott said. As part of the restructuring, the company said yesterday that it would sell Lummus Technology, which licenses gas-processing, refining, petrochemical and coal-gasification technologies, to a joint partnership between private-equity firms Chatterjee Group and Rhône Group for $2.73 billion. The company said it would have the option to retain or buy a 10 percent equity ownership interest in the joint partnership. McDermott said that it expects to hold an auction in about 45 days to solicit superior bids for the Lummus business.
