Shearman & Sterling is representing Citibank, N.A. as administrative agent, collateral agent, and revolving lender on a $1.75 billion DIP financing for Weatherford International plc (Ireland), Weatherford International, LLC (Delaware) and Weatherford International Ltd. (Bermuda) (together, “Weatherford”), which jointly filed chapter 11 bankruptcy cases on July 1, 2019. Concurrently with Weatherford’s prepackaged chapter 11 cases, Weatherford International Ltd. filed a provisional liquidation in Bermuda, and Weatherford International plc anticipates filing examinership proceedings in Ireland later this year.
The total figure on the DIP financing consists of a $750 million DIP revolving loan facility and a $1 billion DIP term loan facility. Proceeds of the DIP facilities will refinance Weatherford’s existing secured revolving and term facilities totaling approximately $614 million, cash collateralize certain existing letters of credit and provide working capital during Weatherford’s prepackaged chapter 11 cases, provisional liquidation in Bermuda, and examinership proceeding in Ireland. Weatherford’s complex global organizational structure, and the fact that only three Weatherford entities (each of which is essentially a holding company with limited physical assets or direct operations) filed for bankruptcy protection, required an innovative financing solution through which the DIP financing was guaranteed by over 40 non-debtor guarantors in the U.S. and 10 other foreign jurisdictions, including Australia, Switzerland and Panama, among others. The Shearman & Sterling team also advised Citibank, N.A. on its pre- and post-petition financial derivative contracts with Weatherford related to foreign currency exchange rates.