McDermott International has announced the relocation of its Morgan City fabrication and marine activities to Altamira, Mexico, following the completion of Morgan City's existing projects in backlog. The company says work should be completed at the facility by the end of the year or early 2014.
Rumors had been flying about a potential slowdown at the facility, with St. Mary Parish President Paul Naquin making a statement about a potential Mexican move in early June.
According to a McDermott press release, the closure is expected to affect approximately 350 employees. McDermott will be providing assistance to these employees over the next several months.
On Monday the company also reported a net loss of $149.4 million, or $0.63 per fully diluted share, for the quarter ended June 30, 2013. These results compared to income of $52.7 million, or $0.22 per fully diluted share, in the corresponding period of 2012. Weighted average common shares outstanding on a fully diluted basis were approximately 236.2 million and 237.5 million in the quarters ended June 30, 2013 and 2012, respectively.
In a press release the company said the Morgan City yard's location and lack of deepwater quayside access are unable to support McDermott customers' project needs today.
Restructuring costs are expected to range between $45 million to $60 million and include severance, asset impairment and relocation expenses, and future Morgan City lease costs. Approximately $15.5 million of these restructuring costs were incurred during the 2013 second quarter, and the majority is expected to be recognized over the next four quarters.
The restructuring also includes personnel reductions in Houston and New Orleans.