McDermott International says subsidiary's liquidity problems resolved

New York, March 31 - McDermott International, Inc. said its J. Ray McDermott SA subsidiary no longer faces "substantial doubt" about its ability to continue as a going concern thanks to measures take to improve liquidity.

The company said that it believes J. Ray McDermott will be able to meet its liquidity needs in 2005 - although it cautioned there are still risks, including the possibility that J. Ray McDermott may be unable to increase its backlog and reduce costs and credit risks at one of its Mexican joint ventures, according to a 10-K filing with the Securities and Exchange Commission.

J. Ray McDermott's previous 10-K annual report included a warning about its ability to continue as a going concern.

Since then J. Ray McDermott has taken some measures under a plan to improve its liquidity. These include:

* Selling its DB60 and Oceanic 93 vessels for cash proceeds of $44 million and $18.7 million respectively. The $18.7 million is now unrestricted while the $44 million is restricted to capital expenditures through July 2005;

* Selling its inactive Ardersier, Scotland, fabrication facility for $14.5 million;

* Completing its Spar projects, allowing the release of a $22 million temporary interest reserve;

* Completing its Belanak FPSO and Carina Aries projects, reducing the risks they will affect liquidity;

* Obtaining a new $25 million letter of credit facility that allowed the release of $25.3 million of cash previously used as collateral for letters of credit;

* Obtaining a $25 million uncommitted credit facility with McDermott International;

* Reducing costs and downsizing some facilities.

McDermott International is a New Orleans-based energy services company.

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