History
Weatherford bought Precision Drilling's services divisions in 2005, funded growth with successive bond issues, and moved its incorporation from Bermuda to Switzerland in 2009.
2005-2006: Buying Precision Drilling's divisions
In August 2005 Weatherford arranged a $1.2 billion, 364-day credit facility with UBS, Bank of America and Morgan Stanley. The money was to redeem its Zero Coupon Convertible Senior Debentures due 2020, pay for a planned acquisition, and cover possible refinancings. Debenture holders converted $367.4 million of face value into about 3.67 million common shares, and the remaining $531.6 million face was repaid for $341.8 million, using a $240 million draw on the facility and $101.8 million of cash.
On September 7, 2005 Weatherford completed the purchase of Precision Drilling's Energy Services and International Contract Drilling divisions. It paid 26,000,000 common shares plus Can$1.13 billion (about US$945 million), borrowing $921 million on the facility for the cash part. It also signed a registration rights, standstill and voting agreement with Precision and hired John R. King and Ian E. Kelly to run two new divisions.
In August 2006 long-term debt began replacing the short-term borrowing. Weatherford sold $600 million of 6.50% senior notes due 2036, raising net proceeds of $588.3 million, and ended its undrawn $600 million 364-day facility without penalty. It also said it would cut its commercial paper program to $700 million.
2007-2008: More debt and a sanctions exit
In June 2007 a U.S. subsidiary sold $1.5 billion of senior notes in a private placement: $600 million at 5.95% due 2012, $600 million at 6.35% due 2017 and $300 million at 6.80% due 2037. Net proceeds were about $1.49 billion. The filing did not say how the money would be used. The company was obliged to register exchange notes, and the interest rate could rise by 0.25% if it failed to do so.
In September 2007 Weatherford said it would stop doing business through foreign subsidiaries in Cuba, Iran, Sudan and Syria, countries under U.S. sanctions, with no new contracts and an orderly wind-down of existing work. No revenue figures were given.
In March 2008 it raised another $1.5 billion in notes: $500 million each at 5.15% due 2013, 6.00% due 2018 and 7.00% due 2038, with net proceeds of about $1.47 billion. It also signed a new $250 million four-year revolving credit facility. Again, the use of the proceeds was not stated. That month the board approved 2008 pay rises and discretionary cash awards, including $3,000,000 to the CEO, although no 2007 bonuses were earned because internal financial targets were missed. Director Sheldon Lubar, on the board since 1995, chose not to stand again.
2008-2009: Moving to Switzerland
On December 10, 2008 Weatherford announced a plan to move its incorporation from Bermuda to Switzerland, with shareholders swapping shares one-for-one. In January 2009 it sold $1.25 billion of notes, $1.0 billion at 9.625% due 2019 and $250 million at 9.875% due 2039, with net proceeds of about $1,233.0 million to repay credit facility borrowings. These coupons were well above the 5-7% on the 2007 and March 2008 notes.
The move was completed on February 26, 2009. Bermuda became a subsidiary, and the Swiss shares began trading on the NYSE as WFT. The Swiss parent guaranteed the listed senior notes and took over the 12.9 million warrants with a $15.00 exercise price, the stock plans and the executive employment agreements. On March 9, 2009 the Bermuda entity ended the registration of its securities.
2009-2018: A quiet record
The major disclosures reviewed here say little about this period. By 2017 the ultimate parent was Weatherford International plc, an Irish company, though the change from Swiss to Irish ownership is not documented in the filings seen. In 2017 the Bermuda subsidiary offered to exchange up to $790 million of 9.875% notes due 2024 ($540 million issued in November 2016 and $250 million in June 2017); the outcome was not seen. On December 14, 2018 a Delaware subsidiary filed to exchange up to $600 million of 9.875% senior notes due 2025, issued February 28, 2018, for registered notes. The offer's expiry date was left blank in the draft.
Written from the 12 story beats below (2005 to 9 Mar 2009), which come from the company's own announcements and filings.