(Bloomberg) -- Some of McDermott International Inc.’s bondholders are hiring advisers and agreeing to restrict their trading so they can get access to confidential information and begin weighing options for the troubled U.S. engineering firm.
A bondholder group controlling about 30% of McDermott’s $1.3 billion of bonds is organizing with law firm Paul Weiss Rifkind Wharton & Garrison LLP and Houlihan Lokey, an investment bank that specializes in restructurings, according a person with knowledge of the matter.
Some members of the group are preparing to sign non-disclosure agreements that would give them access to confidential data in exchange for restricting trades in the company. That would help bondholders gauge what options are available to stabilize the business, said two people familiar with the discussions, who asked not to be identified discussing the private talks.
The moves come two days after McDermott lost almost two-thirds of its stock market value and its bonds and loans plunged, amid struggles with $4 billion of debt it took on to finance an acquisition. After hours of speculation in the market, reports emerged that it had hired restructuring advisers.
The Houston-based company confirmed it had hired Evercore to review unsolicited approaches about selling its Lummus Technology business. McDermott is also getting advice from AlixPartners and Kirkland & Ellis, people familiar with those hires said.
Representatives for McDermott, Paul Weiss and Houlihan Lokey declined to comment, while a spokeswoman for Kirkland & Ellis didn’t immediately respond to a request for comment. The hiring of AlixPartners and Kirkland was previously reported by Dow Jones.
Investors were unnerved because they’d been led to expect that the company would announce it had successfully completed a sale of certain businesses before the end of the third quarter. Instead, McDermott disclosed it hired advisers to study strategic alternatives, including a sale of its Lummus Technology business.
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