Things are getting worse for Weatherford, leading the company to announce filing for Chapter 11 bankruptcy which is expected to be done in the following two months as reported in its Form 10-Q.
Here are some of the key takeaways from Weatherford Form 10-Q that was published on Friday, May 10, following an earlier postponement of its Q1 2019 earning report release:
- As expected, Weatherford reported poor financial results for Q1 2019. The company incurred operating losses in the first quarter of 2019 of around 301 million compared to 39 million in Q1 2018. which requires operating activities to be supplemented with cash from investing and financing activities, making it difficult for the company to negotiate better terms with lenders on new or extended credit facilities and new longer-term debt issuances. This also resulted in Weatherford being unable to generate sufficient liquidity to service all of its debt and other obligations or comply with its debt covenants within the next twelve months.
Weatherford Q1 2019 Earning Results
- Weatherford’s bond price and credit ratings continue to decline resulting in an increased level of uncertainty in the company’s business. These conditions raise substantial doubt about Weatherford to continue as a going concern.
Weatherford’s share price continue to fall, risking the company being delisted from the NYSE. It is expected that share price will dip further next week to new lows.
Despite the fact that Weatherford came through the 2015-2017 oil industry downturn without filing for bankruptcy, the company finally decided to file for Chapter 11 bankruptcy as a result of squeezed revenue, continuous losses & negative operating cash flows and huge outstanding debt and poor financial results that continue to get worse.
