CGG Files For Bankruptcy Protection

(RTTNews) - CGG said that, following execution of legally binding agreements in support of the terms of the agreement-in-principle with key financial creditors announced on June 2, 2017, it has begun legal processes to implement a comprehensive pre-arranged restructuring, with the opening of a Sauvegarde proceeding in France and Chapter 11 and Chapter 15 filings in the U.S.

CGG noted that it will now seek an agreement with the required majorities of creditors. Subject to their support and the plan's approval by the shareholders' general meeting, this agreement will become binding on all creditors following court approval.

In conjunction with the legal proceedings in the U.S. and France, CGG and certain of its financial creditors entered into a lock-up agreement on June 13, 2017, pursuant to which the relevant parties committed to support and to take all steps and actions reasonably necessary to implement and consummate the restructuring plan.

The terms of the lock-up agreement are relatively customary and include a requirement for creditors to vote in favor of the Sauvegarde and Chapter 11 plans , to provide various waivers, to enter into the required documentation to effect the restructuring and not to sell their debt holdings unless the transferee enters into the lock-up agreement or is already a signatory.

As per the terms of the proposed restructuring agreements, upon emergence, approximately $1.95 billion in debt will be eliminated from CGG's balance sheet through full equitization of the principal amount of unsecured debt and the maturity of $0.8 billion of existing secured debt will be extended.

Significantly, the restructuring plan calls for up to $500 million of new money to be raised, split between a $125 million right issue with warrants to be opened to existing shareholders and a $375 million issue of new second lien senior notes with penny warrants to be provided by eligible unsecured senior noteholders under the terms of a Private Placement Agreement.