McDermott International, Inc. (ticker: MDR, exchange: New York Stock Exchange (.N))
News Release -
McDermott's Board of Directors Approves Spin-Off of The Babcock &
HOUSTON, Jul 02, 2010 (BUSINESS WIRE) --
McDermott International, Inc. (NYSE: MDR) ("McDermott") today announced
that its Board of Directors has approved the spin-off of its power
generation systems and government operations segments through the
distribution of shares of The Babcock & Wilcox Company ("B&W"), to
holders of McDermott common stock.
The distribution of B&W common stock is expected to occur on July 30,
2010, with McDermott stockholders receiving one share of B&W common
stock for every two shares of McDermott common stock held at the close
of business on July 9, 2010. Fractional shares of B&W common stock will
not be distributed, and any fractional share of B&W common stock
otherwise issuable to a McDermott stockholder will be sold in the open
market on such stockholder's behalf, and such stockholder will receive a
cash payment with respect to such fractional share.
Following the distribution of the B&W common stock in the spin-off, B&W
will be a separate, publicly traded company, and McDermott will not
retain any ownership interest in B&W. The shares of B&W common stock
will be listed on the New York Stock Exchange under the symbol "BWC."
The completion of the distribution is subject to: the Securities and
Exchange Commission ("SEC") having declared effective B&W's Registration
Statement on Form 10, as amended ("Form 10"), and other conditions
described in the information statement included as an exhibit to the
Form 10, which B&W has filed with the SEC and is available at the SEC's
website at www.sec.gov.
McDermott has received a private letter ruling from the Internal Revenue
Service to the effect that, based on certain facts, assumptions,
representations and undertakings set forth in the ruling, for U.S.
federal income tax purposes, the distribution of B&W common stock and
certain related transactions will not be taxable to McDermott or U.S.
holders of McDermott common stock, except in respect of cash received in
lieu of fractional share interests, which generally will be taxable to
such holders as capital gain.
"We have made great progress over the past six months, and I am very
pleased to now be reaching this important point in the process of
completing the B&W spin-off," said John A. Fees, Chief Executive Officer
of McDermott. "As we outlined in December, we believe the spin-off will
provide important benefits to our stockholders. We believe that as
separate, independent, publicly traded entities, B&W and the remaining
McDermott will benefit from enhanced management focus, more efficient
capital allocation and greater operational and strategic flexibility. We
also believe that the spin-off will help preserve B&W's ability to
contract with the U.S. Government. I am proud of the shared
accomplishments of McDermott and B&W as a combined group of companies,
and I look forward to their future, independent successes as they each
continue to remain focused on the best, long-term interests of their
customers and stockholders. I also want to extend my sincere
appreciation to all of our employees whose tireless efforts and
commitment have made the spin-off possible."
No action is required by McDermott stockholders in order to receive
shares of B&W common stock in the spin-off distribution, and McDermott
stockholders should retain their McDermott stock certificates. McDermott
stockholders entitled to receive the dividend will receive a book-entry
account statement reflecting their ownership of shares of B&W common
stock or their brokerage account will be credited for the shares.
McDermott expects that a "when-issued" public market for B&W common
stock will commence shortly after the July 9, 2010 record date and will
continue through the distribution date. McDermott also anticipates that
"regular-way" trading of B&W's common stock will begin on August 2,
2010, the first trading day following the distribution date.
In addition, shortly after the July 9, 2010 record date, it is expected
that shares of McDermott common stock will begin trading two ways -
either with or without the distribution of the shares of B&W. McDermott
stockholders who sell their shares of McDermott common stock in the
"regular-way" market (i.e., the normal trading market on the NYSE under
the symbol "MDR") after the record date and on or prior to the
distribution date will be selling their right to receive shares of B&W
common stock in connection with the spin-off. It is anticipated that
shares of McDermott common stock will also trade "ex-distribution" (that
is, without the right to receive the B&W distribution) during that
period under the symbol "MDRwi." Investors are encouraged to consult
with their financial advisors regarding the specific implications of
buying or selling shares of McDermott common stock on or before the
McDermott expects to mail the information statement to all stockholders
entitled to receive the distribution of shares of B&W common stock on or
about July 21, 2010. The information statement will describe B&W, the
various risks involved, including the risks of holding B&W common stock,
and other details of the transaction, including additional details
regarding the spin-off.
About The Babcock & Wilcox Company
B&W is a leading technology innovator in power generation and a
specialty manufacturer of nuclear components with a rich legacy spanning
over 140 years. B&W designs, engineers, manufactures, and constructs
power generation systems, primarily for large utility and industrial
customers, as well as related aftermarket parts, services and
environmental control systems. For its largest customer, the U.S.
Government, B&W supplies nuclear components for defense programs and
manages and operates nuclear facilities and environmental management
sites. B&W has locations worldwide and employs over 13,000 people, not
including approximately 10,000 joint venture employees.
About McDermott (following the spin-off of B&W)
McDermott is an engineering and construction company, and will be
focused on the offshore upstream oil and gas market. McDermott provides
front-end design and detailed engineering, construction and installation
of offshore production facilities, pipelines and subsea systems.
McDermott's customers include national and major oil and gas companies
worldwide, and it has a significant presence in the Americas,
Asia-Pacific, Caspian and Middle East markets. McDermott employs
approximately 16,000 people worldwide.
Forward Looking Statements
In accordance with the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995, as amended, McDermott cautions that
statements in this press release, which are forward-looking and provide
other than historical information, involve risks and uncertainties that
may impact McDermott's actual results of operations or may otherwise be
material. These forward-looking statements include statements about the
completion of the spin-off, the expected distribution date, the listing
of the shares of B&W common stock on the NYSE, the tax-free nature of
the spin-off distribution and certain related transactions, the
anticipated benefits of the spin-off, the future successes of the two
companies, the anticipated dates for B&W common stock to begin trading
on a "when-issued" basis and on a "regular-way" basis and for McDermott
stock to begin trading on an "ex-distribution" basis and the expected
mailing date for the information statement. Although we believe that the
expectations reflected in those forward-looking statements are
reasonable, we can give no assurance that those expectations will prove
to have been correct. Those statements are made by using various
underlying assumptions and are subject to numerous uncertainties and
risks, including that the two companies may be unable to realize the
anticipated benefits of the spin-off, the spin-off distribution may not
be completed as anticipated or at all and delays or other difficulties
in completing the distribution may be experienced. If one or more of
these risks materialize, or if underlying assumptions prove incorrect,
actual results may vary materially from those expected, projected or
implied. For a more complete discussion of these and other risk factors,
please see McDermott's annual and quarterly filings with the SEC,
including its annual report on Form 10-K and quarterly reports on Form
10-Q, and the Form 10. This press release reflects management's views as
of July 2, 2010. Except to the extent required by applicable law,
McDermott undertakes no obligation to update or revise any
SOURCE: McDermott International, Inc.
McDermott International, Inc.
Investor Relations & Corporate Communications
Jay Roueche or Robby Bellamy