In the first half of 2016 Weatherford (NYSE:WFT) raised so much capital it made my head spin. In March the company raised $630 million in equity; months later it raised $2.7 billion in debt. The $3.3 billion in fresh capital shored up Weatherford’s balance sheet, pushed back near term principal payments, and avoided a potential debt covenant breach. Nonetheless, in March I estimated that based on liquidation value Weatherford was insolvent by $1.6 billion.
Months later Weatherford’s debt remains untenable. At year-end 2015 Weatherford had $7.4 billion in debt at 6.4x run-rate EBITDA (last three quarters annualized). At Q3 2016 the company had $7.5 billion in debt at 31x run-rate EBITDA. Through year-to-date September 2…
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