J Ray McDermott provides liquidity updateNews // July 9, 2004
As of June 28, 2004, J Ray had total cash, cash equivalents and investments of US$208 million, of which US$133 million is currently restricted, primarily for letters of credit and an interest reserve. J Ray's unrestricted cash balance at June 28, 2004 was US$75 million, which compares to US$68 million at May 6th 2004.
The current unrestricted cash balance continues to exceed management's earlier expectations.
J Ray also announced that it has reached agreement with prospective lenders on a term sheet related to its expected new letter-of-credit facility.
Completion of the LC facility is subject to negotiation of a credit agreement by and among the lenders and J Ray, and establishing an acceptable borrowing base of accounts receivable.
A draft of the credit agreement is currently under review by all parties.
"We are pleased that, through improved operating and cash flow performance, J Ray's unrestricted cash balances have exceeded our forecasts to date for 2004," said Frank Kalman, executive vice president and chief financial officer of McDermott.
"J Ray is continuing to work towards completion of the new letter of credit facility, which would provide J Ray additional liquidity; although with the improving liquidity profile at J Ray and the previously announced inter-company facility, we believe JRay's liquidity position is much stronger than previously anticipated."
J Ray continues to pursue sales of certain non-strategic assets, which would further enhance its liquidity.