Weatherford International plc has applied to have its share listed on the Nasdaq Exchange. The stock used to trade on the NYSE until they were delisted in April 2020 for having too low a share price.
Weatherford entered Chapter 11 bankruptcy in July 2019 and exited in December 2019, having converted $7.6 billion of debt into equity. With hindsight, it left bankruptcy proceedings too soon as its business was ravaged by the pandemic.
In 2020, revenues were $3.7 billion, a drop of 26% on the prior year. It made an operating loss of $1.5 billion. The losses included a goodwill write off of $239 million, which was all the goodwill created in the fresh-start accounting when it emerged from bankruptcy. There was also impairment of $814 million on intangible assets ($155 million), fixed assets ($571 million) and right-of-use assets ($88 million). Again these were values determined in the fresh-start accounting.
When Weatherford exited Chapter 11 in December 2019, it had shareholders’ equity of $2.9 billion and long-term debt of $2.1 billion. One year later, it now has equity of $937 million and long-term debt of $2.6 billion.
While the Business suffered, the Executives didn’t…
Weatherford has had a reputation for paying large severances while performing poorly. The registration statement continues that trend by disclosing;
- ex-CEO Mark McCollum (left June 2020) received $4.6 million in severance. For good measure, he also received $780,000 in cash bonuses in 2020.
- COO Karl Blanchard retired in February 2020. The bankruptcy was deemed a change-of-control under his contract so he gets 3 x base salary (3 x $700,000) plus 1 x average bonus for the past 3 years. It’s hard to tell what the average bonus is. He didn’t get any bonuses in 2018 or 2019 but got $2.2 million in bonuses for his interim CEO position in the 2nd half of 2020. He was also paid $672,955 in 2020 for cash bonuses in lieu of stock options.
- Stuart Fraser, Chief Accounting Officer, is leaving March 31, 2021. He has the same change-of-control clause as Mr. Blanchard. Mr. Fraser gets 2 x base (2 x $425,000) plus average annual bonus. He also got $270,938 in 2020 for cash bonuses in lieu of stock options.
- Mark Swift, former President of the Western Hemisphere, left in March 2020 with a $1.4 million severance.
Weatherford employed 17,200 at December 2020, down nearly 7,000 from the prior year.