09 November 2001 22:38 [Source: ICIS news]
HOUSTON (CNI)--Global engineering and contractor Washington Group International (WGI) said Friday it is prepared to move forward with existing and new projects after reaching a settlement with creditors and disposing of litigation with Raytheon Company.
Katrina Puett, spokeswoman for Boise, Idaho-based WGI, said the agreement reached between WGI and its creditors and settlement of lawsuits between WGI and Raytheon leave WGI "with a strong balance sheet with some $500m [Euro562m] in capital, no debt and restored bonding" which will allow the company to get back to business.
Approval and entry of the agreement is anticipated at a 19 November hearing before the US Bankruptcy Court at Reno, Nevada. Puett said that the agreement is subject to the court's approval but she noted that all parties to the matter have accepted the deal and court approval is seen as likely.
Under terms of the settlement, WGI's secured lenders will receive 80% of the primary equity in the newly reorganised company and $20m in cash. Unsecured creditors will receive 20% of the primary equity and the right to purchase, through warrants, up to an additional 25% of new common stock in the reorganised firm during a four-year period following court approval.
The agreement also provides for mutual releases between WGI and Raytheon, disposing of cross claims against each other arising out of WGI's acquisition of Raytheon Engineers & Constructors (RE&C).
WGI president and chief executive Stephen Hanks said: "During the course of bankruptcy the company has been able to hold its position as a leader in the engineering and construction industry's fastest growing markets. We will emerge with a financial foundation that ensures we can move forward, build our business and continue to deliver world-class engineering and construction services to our clients."
The creditor groups and former WGI chief executive Dennis Washington have agreed that Washington will continue as chairman of WGI for at least two years and will have the right to purchase, through stock options, up to 10% of common stock in the reorganised company. He also is entitled to acquire another 30% of the company's shares through open market or privately negotiated transactions.
WGI, which incorporates the former Morrison Knudsen construction company with RE&C, has a long history and interests in chemical plant construction.
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