Weatherford International plc, one of the largest oilfield services (OFS) companies in the world, is restructuring to reduce long-term debt and establish a “more sustainable” business.

The Switzerland-based operator last Friday executed a restructuring support agreement (RSA) with a group of its senior noteholders that collectively holds about two-thirds of the senior unsecured notes.

Weatherford expects to implement the RSA through a pre-packaged Chapter 11 process and file for voluntary protection.

“During the past year, we have been executing a company-wide transformation to fundamentally improve the way we operate our business and to strengthen Weatherford for the long run,” said CEO Mark A. McCollum. “Despite the challenging market dynamics our industry continues to face, we believe that our transformation strategy, which is designed to improve our execution capabilities, lower our cost structure and create efficiency to allow us to better price our products and services, will position Weatherford for long-term success.

“However, we still face a high level of debt that affects our ability to make investments in our company and implement further elements of our transformation plan…We expect that the new capital structure will allow us to continue to capitalize on our momentum and build a truly integrated service company with sustainable profitability and long-term growth potential.”

The RSA would allow Weatherford to continue operating the businesses and facilities without disruption to customers, vendors, partners or employees, with all claims paid in full in the ordinary course of business.

“We are taking these actions to ensure we can do an even better job of meeting our commitments to all of our key stakeholders by creating the strongest Weatherford possible,” McCollum said. “We do not anticipate any operational disruptions as a result of this announcement. Our customers, partners, employees and vendors should not experience any changes in the way we do business, and we expect their experience will improve after a restructuring is complete.

“We expect a restructuring will provide us with improved liquidity and greater financial stability and flexibility to make investments to enhance our platform while we continue to invest in the resources necessary for our business to grow. We are confident that these steps will allow us to continue our transformation journey and position Weatherford for long-term success.”

McCollum and his management team have been working to extricate Weatherford from a financial jam that began before he took over that included investment miscues and improprieties. During the 4Q2018 conference call, McCollum addressed the “elephant in the room,” about whether a capital restructuring or voluntary bankruptcy was in the cards.

“I’m going to be real honest,” McCollum said, “obviously we recognize that we have got these maturities that are out there” with term loans coming due into 2021. However, he said, “I don’t waste a lot of time thinking or planning how to fail. Our energy as a team here is 100% focused on working to succeed on the path forward for us, a path that we can control, the actions that we can take in continuing to execute the transformation plan and do that quarter in and quarter out…”

Weatherford employs about 26,000 people, operates in more than 80 countries and has a network of about 650 locations, including manufacturing, service, research and development, and training facilities.

Tudor, Pickering, Holt & Co. on Monday called Weatherford “the most frustrating OFS story we’ve ever followed as we’ve liked the company’s product/service portfolio (particularly after it jettisoned its capital intensive U.S. pressure pumping business and most of its higher-profile international land rig assets), yet it always seemed to be a case of one step forward, two steps backward.”

Weatherford now is at risk of losing market share this year, analysts noted. “Simply put, we got our…stock call miserably wrong, and our final stock rating will serve as a painful, but helpful mental note to self for us going forward, that the balance sheet always trumps the business mix.”