MRC Global (MRC) to Restructure, Downsize Australian Operations

August 23, 2016 4:40 PM EDT
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MRC Global (NYSE: MRC) disclosed the following on Tuesday:

On August 19, 2016, MRC Global Inc. (“MRC Global” or the “Company”) committed to a plan to restructure and significantly downsize its Australian operations in response to the continued downturn in the oil and gas and mining industries in the region. This plan, which will begin immediately and is expected to be completed by the first quarter of 2017, includes the consolidation of facilities and locations, involuntary employee terminations and asset impairment charges. Pre-tax charges associated with the restructuring plan are expected to total $18 million to $24 million, including cash expenditures of $11 million to $14 million. The majority of these costs are expected to be incurred in the third and fourth quarters of 2016 and include, on a pre-tax basis, $7-$10 million of inventory-related charges, $6-$7 million of lease termination costs, $3-$4 million for facilities relocations and $2-$3 million of employee termination costs. Due to the current pre-tax loss position in Australia, the Company does not expect to recognize a tax benefit on any of these charges.

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