Weatherford International plc – Seeks $1.75bn in DIP Financing as Available Cash Drops to $10mn

July 1, 2019 – The Debtors requested Court authority to (i) access $1.0bn in debtor-in-possession (“DIP”) financing, consisting of (i) a first lien superpriority DIP Revolving Credit Facility with aggregate commitments of $750.0mn and a letter of credit sub-facility (the “DIP L/C Sub-Facility”) in an aggregate amount of $50.0mn and (b) a DIP Term Loan Facility in an aggregate principal amount of $1.0bn.

On an interim basis, the Debtors are requesting access to $1.5bn comprised of (a) $1.0bn from the DIP Term Loan Facility and (b) $500.0mn from the DIP Revolving Credit Facility.

From that interim amount, the Debtors are obligated to (i) pay down $316.74mn owing under their prepetition secured revolving credit facility (the "Prepetition Secured Revolving Credit Facility"), (ii) pay down $297.50mn owing under their prepetition secured term loan facility (the "Prepetition Secured Term Loan Facility") and (iii) cash collateralize letters of credit issued under the Debtors prepetition revolving facility (the "Prepetition Revolving Facility," not to be confused with the Prepetition Secured Revolving Credit Facility) and Bilateral L/C Facilities in an aggregate amount not to exceed $500.0mn (as at the Petition date, $305.0mn was owed under the Prepetition Revolving Facility and approximately $166.3mn in respect of letters of credit).

The Debtors DIP financing motion states: "Absent entry into the DIP Facility, the Debtors will have insufficient liquidity to continue operating in the ordinary course and the Debtors’ restructuring efforts will come to a grinding halt. As of the Petition Date, without access to the DIP Facility, the Debtors and non-Debtor Guarantors in North America have only $50.0 million in cash – of which $40.0 million is restricted – leaving the Debtors and non-Debtor North American guarantors with only $10.0 million in available cash to support operations and fund the Chapter 11 Cases. Moreover, there is no additional liquidity from foreign non-Debtor subsidiaries outside the non-Debtor North American guarantors, as their cash is either trapped, pledged to letters of credit, or below minimum operating levels. The relief requested herein is necessary to preserve the Debtors’ operations as well as to provide the Debtors the opportunity to consummate their heavily-negotiated restructuring which will benefit all stakeholders.

Key Terms of the DIP Financing:

• Borrowers: Weatherford International plc, Weatherford International Ltd., and Weatherford International, LLC.
• Guarantors: Certain other non-Debtor subsidiaries.
• DIP Agent: Citibank, N.A., as administrative agent and collateral agent. 
• Syndication Agent: Deutsche Bank Securities, Inc.
• Lead Arrangers and Joint Bookrunners: Citigroup Global Markets, Inc., Barclays Bank PLC, Deutsche Bank Securities, Inc., Morgan Stanley Senior Funding, Inc. and RBC Capital Markets
• Loans: The DIP Loans consist of the Term Loan in an aggregate principal amount of $1.0bn and the Revolving Credit Loan in the amount of $750.0mn.
• Milestones: None
• Roll-Up: $316.74mn owing under the Prepetition Secured Revolving Credit Facility and $297.50mn owing under the Prepetition Secured Term Loan Facility.
• Term: The maturity date is the earliest of (i) the date that is 12 months following the Petition Date, (ii) 60 days after the Petition Date if the Final Order has not been entered prior to the expiration of such 60-day period, (iii) the substantial consummation of any plan filed in the Chapter 11 Cases that is confirmed pursuant to an order entered by the Bankruptcy Court, (iv) the date of acceleration of the Obligations and the termination of the Commitments with respect to the Revolving Credit Facility in accordance with the terms of the DIP Credit Agreement, (v) the date that is the earliest to occur of: (a) the date on which the Acceptable Bermuda Scheme is not sanctioned by the Bermuda Court or is withdrawn for whatever reason, (b) implementation of the Acceptable Bermuda Scheme on the effective date thereof, or as ordered by the Bermuda Court, or (c) the date on which the Bermuda Court grants a permanent injunction restraining creditors in the case from proceeding against WIL-Bermuda contrary to the Confirmation Order, (vi) the date, following the commencement of the Irish Process, that is the earlier to occur of: (a) date on which the Irish Process is terminated, and the Examiner is discharged, without an Acceptable Scheme of Arrangement having been confirmed by the Irish Court, (b) the date on which an Acceptable Scheme of Arrangement becomes effective in accordance with its terms by order of the Irish Court, or (vii) the date of consummation of a sale of all or substantially all of the Debtors’ assets under Section 363 of the Bankruptcy Code.
• Interest Rates: 
  • The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Margin.
  • The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin.
  • “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to (i) the LIBO Rate for such Interest Period multiplied by (ii) the Statutory Reserve Rate.
  • "Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (i) the Prime Rate in effect on such day, (ii) the NYFRB Rate in effect on such day plus ½ of 1% and (iii) the Adjusted LIBO Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, provided that, for the purpose of this definition, the Adjusted LIBO Rate for any day shall be based on the LIBO Screen Rate (or if the LIBO Screen Rate is not available for such one month Interest Period, the Interpolated Rate) at approximately 11:00 a.m. London time on such day. Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate, respectively. For the avoidance of doubt, if the Alternate Base Rate shall be less than zero, such rate shall be deemed to be zero for purposes of the DIP Credit Agreement
  • “Applicable Margin” means, for any day, (i) with respect to any Eurodollar Loan, 3.000% per annum and (ii) with respect to any ABR Loan, 2.000% per annum.
• Fees:
  • Commitment Fee: The Revolving Credit Borrowers, jointly and severally, agree to pay to the Administrative Agent for the account of each Revolving Credit Lender a commitment fee, which shall accrue during the period from and including the Effective Date to but excluding the date on which such Revolving Credit Lender’s Revolving Credit Commitment terminates, at the rate of 0.375% per annum on the average daily amount of the Unused Revolving Credit Commitment of such Revolving Credit Lender. Accrued commitment fees shall be payable in arrears on the last day of each calendar month, on the Maturity Date and on the date on which the aggregate Revolving Credit Commitments terminate, commencing on the first such date to occur after the date hereof; provided that any commitment fees accruing after the date on which the aggregate Revolving Credit Commitments terminate shall be payable on demand. All commitment fees shall be computed on the basis of a year of 360 days, and shall be payable for the actual number of days elapsed (including the first day but excluding the last day)
  • Participation Fee: – The Revolving Credit Borrowers, jointly and severally, agree to pay to the Administrative Agent, for the account of each Revolving Credit Lender in accordance with its Applicable Percentage, a participation fee with respect to the Revolving Credit Lenders’ participations in Letters of Credit, which shall accrue at the rate per annum equal to the Applicable Margin for any Eurodollar Loan on the average daily Dollar Equivalent amount available to be drawn under such Letter of Credit during the period from and including the date of issuance of such Letter of Credit up to but excluding the earlier of (i) the date on which such Letter of Credit expires or terminates and (ii) the Maturity Date.
  • Fronting Fee: The Revolving Credit Borrowers, jointly and severally, agree to pay to each Issuing Bank, for its own account, a fronting fee with respect to each Letter of Credit issued by such Issuing Bank, which shall accrue at the rate of 0.125% per annum on the average daily Dollar Equivalent amount available to be drawn under such Letter of Credit during the period from and including the date of issuance of such Letter of Credit up to but excluding the date on which such Letter of Credit expires or terminates, as well as such Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of such Letter of Credit or processing of drawings thereunder.

Debtors' Prepetition and Re-organized Capital Structure

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