McDermott International Inc. said March 3 it is moving forward with the previously announced sale all of the Lummus Technology business to a joint partnership between The Chatterjee Group and Rhône Capital.

The sale is a part of a “stalking-horse” process related to McDermott’s Chapter 11 bankruptcy, which the Houston-based company filed for with the U.S. Bankruptcy Court for the Southern District of Texas in January.

“The restructuring transaction, which has the full support from all of our funded creditors, including our unsecured bondholders, is further recognition of McDermott's fundamentally solid operating business and proven strategy,” David Dickson, president and CEO of McDermott, said.

McDermott did not receive a higher or better bid during the solicitation period, and the auction previously scheduled for March 9 will not occur.

As announced on Jan. 21, subsidiaries of McDermott 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, subject to higher or otherwise better bids received through a court-supervised auction process. Under the terms of the agreement, McDermott will have the option to retain or purchase, as applicable, a 10% 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 March 12.

Proceeds from the sale of Lummus Technology are expected to repay McDermott’s DIP financing in full, as well as fund emergence costs and provide cash to the balance sheet for long-term liquidity.

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