Weatherford bankruptcy news has WFT stock falling on Monday.
Weatherford (NYSE:WFT) is planning to restructure its debt through the use of the Chapter 11 bankruptcy. The goal of the Weatherford bankruptcy is to have the company reduce its total debt by $5.80 billion.
According to documents filed with the U.S. Securities and Exchange Commission, the Weatherford bankruptcy will have the company canceling existing unsecured notes. These notes will be changed for 99% of the common stock of the reorganized Company and $1.25 billion of new tranche B senior unsecured notes to be issued by the reorganized Company with a seven-year maturity.
Also part of the Weatherford bankruptcy are plans to cancel existing equity. The company instead exchange this for 1% of the New Common Stock. It will also offer three-year warrants to purchase 10% of the New Common Stock.
So why exactly is a Weatherford bankruptcy taking place? That’s easy enough. The company has been building up debts over the years that it needs to pay down. Even worse is the fact that it hasn’t turned a profit in more than four years. It’s hard to reduce debt when the company can’t even make money.
The Weatherford bankruptcy news comes alongside a poor earnings report for the first quarter of 2019. This includes losses per share of 48 cents on revenue of $1.346 billion. Wall Street was looking for losses per share of 13 cents on revenue of $1.348 billion for the period.
WFT stock was down 3% as of Monday afternoon.
As of this writing, William White did not hold a position in any of the aforementioned securities.