The financial restructuring has been initiated by the firm through pre-packaged chapter 11 process to reduce its debt by more than £4.5bn

Oil Pumps

Image: Oilfield services company Weatherford intends to reduce debt. Photo: courtesy of Dani Simmonds/Freeimages.com.

US-based oilfield services company Weatherford International has filed for the bankruptcy protection under Chapter 11 in the US, to reduce its debts.

The firm has initiated financial restructuring and is being implemented through pre-packaged Chapter 11 process to reduce its debt by more than $5.8bn (£4.5bn).

Weatherford’s proposed restructuring contemplates $1.75bn (£1.34bn) in new financing and up to $1.25bn (£947.8m) in additional post-emergence financing.

As part of the petition, the company has filed first day motions, which will enable its day-to-day operations to continue as usual.

Weatherford receives £1.34bn in DIP from lenders

Weatherford said it has received $1.75bn (£1.34bn) of debtor-in-possession financing (DIP Facility) from lenders.

These proceeds will be used to fund the company’s working capital needs throughout the cases, the firm noted

Weatherford said in a statement: “Additionally, upon exit from bankruptcy the Company will have access to additional financing in the form of (a) an undrawn first lien exit revolving credit facility in the principal amount of up to $1.0 billion, and (b) up to $1.25 billion of new tranche A senior unsecured notes with a five-year maturity.

“In addition, on emergence from bankruptcy the Company will issue $1.25 billion of new tranche B senior unsecured notes with a seven-year maturity to holders of the Company’s existing unsecured notes.”

In addition to reduce long-term debt and related interest costs, the company expects the comprehensive financial restructuring to provide access to additional financing and establish a more sustainable capital structure.

Lazard is the financial advisor for the company, Latham & Watkins as legal counsel, and Alvarez & Marsal as restructuring advisor.

In April 2019, Weatherford International divested its surface data logging business to Excellence Logging for $50m (£39.4m), as part of its plans to focus on core businesses most closely aligned with its long-term strategy and to reduce its debt.

Employing approximately 26,000 people, Weatherford is engaged in providing innovative solutions, technology and services to the oil and gas industry.

With operations in over 80 countries, the firm has a network of approximately 650 locations, including manufacturing, service, research and development and training facilities.