McDermott, based in Houston builds oil platforms and gas export plants for energy producers.
It is now negotiating a restructuring plan that could see its debt converted to equity with existing term-loan lenders getting the majority of the share, said 'people with knowledge of the matter', according to the article.
Unsecured creditors would receive less than 10% of the equity along with warrants.
The terms of the restructuring are still being negotiated and could change, according to the people, who asked not to be identified because the talks are private.
A group of lenders led by HPS Investment Partners and Baupost Group LLC are in talks to provide a loan of around $2 billion to keep the company’s operations running during bankruptcy, the Wall Street Journal reported in late December.
Representatives for McDermott and HPS declined to comment, according to Bloomberg.