USA: Business Deal Mc Dermott to Go Ahead with Lummus Technology Sale
Mc Dermott will sell its Lummus Technology business to the joint partnership between The Chatterjee Group and Rhône Capital as per the share and asset purchase agreement signed earlier this year. The decision was undertaken as the firm failed to receive any higher bid for the technology.
Houston/USA – Mc Dermott International has recently announced that it intends to move forward with the previously announced share and asset purchase agreement to sell all of the Lummus Technology business to a joint partnership between The Chatterjee Group and Rhône Capital (the ‘Joint Partnership’). Mc Dermott did not receive a higher or better bid during the solicitation period, and the auction previously scheduled for Monday, March 9, 2020, will not occur.
As announced on January 21, 2020, subsidiaries of Mc Dermott entered into a share and asset purchase agreement to sell Lummus Technology to The Chatterjee Group and Rhône Capital, as the ‘stalking horse bidder,’ for a base purchase price of 2.725 billion dollars. This was subject to higher or otherwise better bids received through a court-supervised auction process. Under the terms of the Agreement, Mc Dermott will have the option to retain or purchase, as applicable, a 10 per cent common equity ownership interest in the entity purchasing Lummus Technology.
The sale hearing to confirm the sale of Lummus Technology to the Joint Partnership will take place on Thursday, March 12, 2020.
Proceeds from the sale of Lummus Technology are expected to repay Mc Dermott's DIP financing in full, as well as fund emergence costs and provide cash to the balance sheet for long-term liquidity.