WEATHERFORD TO FILE FOR CHAPTER 11 BANKRUPTCY PROTECTION
Weatherford International has entered into an agreement with its top creditors that will allow the company to file for a prepackaged Chapter 11 bankruptcy — after more than four years without making a profit.
In a Securities and Exchange Commission recent filing, Weatherford said “the market outlook for our company and the energy sector continues to be constrained due to the uncertainty of anticipated activity particularly in North America, including lower spending by many of our customers resulting in lower than expected benefits from our transformation.” Because of those uncertainties and tightened access to credit “the company believes that it will not be able to generate sufficient liquidity to service all of its debt and other obligations or comply with its debt covenants at some point within the next twelve months” and that these “conditions raise substantial doubt about our ability to continue as a going concern.”
The agreement allows the Swiss company, which has principal operations in Houston, to shed $5.8 billion of its $7.6 billion in long-term debt — in exchange for 99 percent of the stock in the reorganized company. The agreement also provides the company with $1.75 billion in fresh credit and loans.
Weatherford expects to implement the agreement through a “prepackaged” Chapter 11 bankruptcy filing in the United States and similar proceedings in Ireland.
Weatherford has not made a profit since the third quarter of 2014. The company reported a $481 million loss in the first quarter, widening from $242 million loss from the same period in 2018. Revenues slipped to $1.35 billion of revenue during the first quarter from $1.42 billion a year earlier.
Headqurtered in Baar, Switzerland, Weatherford is one of the largest oilfield service companies in the world. The global company had 67,000 employees at the beginning of 2014 but today, it employs around 26,500 people in 80 nations. The company was founded in 1941 in Weatherford, Texas as the Weatherford Spring Company. In 1948, the company was renamed Weatherford Oil Tool Company (WOTCO).