Weatherford tackles $2.3 billion debt, hopes to cut interest expense

By Devika Patel

Knoxville, Tenn., Feb. 17 – Weatherford International plc garnered a ratings upgrade to B- from S&P last quarter after refinancing or repaying $2.3 billion of debt in the quarter.

The company is focused on lowering its interest expense and hopes to further fortify its capital structure this year.

“We successfully completed phase one of our efforts to restructure our debt by refinancing $2.1 billion and repaying $200 million of debt during the fourth quarter, resulting in a significantly-improved debt maturity profile and reducing cash interest by approximately $71 million per year,” executive vice president and chief financial officer H. Keith Jennings said on the company’s fourth quarter and year ended Dec. 31, 2021 earnings conference call on Thursday.

“In the fourth quarter, Standard & Poor’s upgraded the company’s corporate credit rating to B-,” Jennings said.

The company is very focused on lowering interest expense and has somewhat improved its financial position during 2021 but still intends to continue to fortify its capital structure.

“We strengthened our capital structure by using the cash generated from the business to pay down debt and concluded a series of refinancing transactions,” president and chief executive officer Girish K. Saligram said on the call.

“These actions significantly reduced our interest expense and favorably positions the company for the long term,” Saligram said.

“We are very focused on reducing our interest expense,” Saligram said.

“We know we’ve got to address the capital structure.

“We have taken a huge set of steps towards that last year and improved where we stand,” Saligram said.

Management is pleased with the fourth quarter results despite headwinds from Covid-19, inflation and supply-chain problems.

“I am pleased with the results of the fourth quarter of 2021, which build on the momentum we have generated throughout the year,” Saligram said.

“We faced significant challenges, including inflationary pressure, supply chain bottlenecks and ongoing disruptions caused by the pandemic.

“Despite these headwinds, the Weatherford team delivered another quarter in-line with our outlook and outperformed in some instances,” Saligram said.

Adjusted EBITDA was $571 million for the year ended Dec. 31, 2021, compared to $459 million for the year ended Dec. 31, 2020.

Cash and cash equivalents were $951 million as of Dec. 31, 2021, compared to $1,118,000,000 as of Dec. 31, 2020. Cash and cash equivalents were $1,291,000,000 as of Sept. 30, 2021.

Long-term debt was $2,416,000,000 as of Dec. 31, 2021, compared to $2,601,000,000 as of Dec. 31, 2020. Long-term debt was $2,431,000,000 as of Sept. 30, 2021.

Net debt was $1,315,000,000 as of Dec. 31, 2021, compared to $1,329,000,000 as of Dec. 31, 2020.

Weatherford is an oilfield services company based in Baar, Switzerland.

© 2015 Prospect News.
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