8-KMaterial AgreementsFinancial EventsOther Events+1

TechnipFMC plc 8-K Report, Material Agreement (Jan 17, 2017)

Filed January 17, 2017For Securities:FTI

Summary

This Form 8-K filing by TechnipFMC plc (FTI) on January 17, 2017, primarily announces the completion of a significant business combination between Technip S.A. and FMC Technologies, Inc. The newly formed entity, TechnipFMC plc, has established a new $2.5 billion senior unsecured revolving credit facility, which can potentially be increased to $3.0 billion, to manage its ongoing financial operations and liquidity needs. This facility includes subfacilities for letters of credit and swingline loans, with interest rates tied to LIBOR/EURIBOR or a base rate, plus an applicable margin that varies based on the company's credit rating. The filing also details the assumption of all prior debts and liabilities of Technip by the combined company, a change in the company's independent registered public accounting firm from KPMG LLP to PricewaterhouseCoopers LLP (PwC), and the approval of contracts to enable future share repurchases. Additionally, the company has re-registered as a public limited company in England and Wales. These events collectively signify the formal establishment of TechnipFMC plc and its initial financial and corporate structure post-merger.

Key Highlights

  • 1Completion of the business combination between Technip S.A. and FMC Technologies, Inc., forming TechnipFMC plc.
  • 2Establishment of a new $2.5 billion senior unsecured revolving credit facility, with potential to increase to $3.0 billion.
  • 3The credit facility includes $1.5 billion for letters of credit and a $500 million swingline loan subfacility.
  • 4TechnipFMC plc has assumed all prior debts, liabilities, and obligations of Technip S.A.
  • 5Change in independent registered public accounting firm from KPMG LLP to PricewaterhouseCoopers LLP (PwC).
  • 6Approval of contracts for future share repurchases on NYSE and Euronext Paris, with repurchased shares to be cancelled.
  • 7Re-registration of the company as a public limited company in England and Wales.

Frequently Asked Questions

This 8-K filing announces the completion of the business combination between Technip S.A. and FMC Technologies, Inc., resulting in the formation of TechnipFMC plc. It also details key financial and corporate actions taken in conjunction with this merger, including the establishment of a new credit facility and changes in accounting firms.

The new $2.5 billion senior unsecured revolving credit facility provides TechnipFMC plc with significant liquidity. It includes flexibility for letters of credit and swingline loans, and can be increased to $3.0 billion under certain conditions. Interest rates are variable, based on LIBOR/EURIBOR or a base rate plus a margin tied to the company's credit rating, providing flexibility in managing borrowing costs.

The change from KPMG LLP to PricewaterhouseCoopers LLP (PwC) is a standard procedure following a major merger or restructuring. It signifies a new independent oversight for the combined entity's financial reporting. The filing states there were no disagreements with KPMG, and PwC was not consulted prior to their engagement on any specific accounting issues, which is typical in such transitions.

The approval of contracts for share repurchases indicates the company's intention to potentially buy back its own shares on the NYSE and Euronext Paris in the future. However, the actual amount and timing of these repurchases are subject to further board consideration. Any repurchased shares will be cancelled, which could potentially impact the number of outstanding shares and earnings per share over time.