CGG launches its share capital increase with
preferential subscription rights for an amount of approximately
€112.2 million through the issuance of new shares, each with one
warrant attached
- Subscription price: €1.56 per new share, each with one
warrant attached
- Subscription ratio: 13 ABSAs for 4 Rights
- Subscription period: from January 22, 2018 to February
2, 2018 inclusive
- Trading period for Rights: from January 18, 2018 to
January 31, 2018 inclusive
- The transaction is part of CGG's financial restructuring
plan and allows the subscribers to take part in the recovery of the
sector through the Warrants #2
- The transaction is backstopped by DNCA (in cash) for up to
approximately €71.39 million and by the Senior Note holders for the
remaining unsubscribed portion (by way of set-off against
claims)
Paris, France - January 17, 2018
CGG (the "Company") announces today the
terms of its share capital increase with preferential subscription
rights (the "Rights") for an amount of approximately €112.2
million (including share premium) (the "Rights Issue"), by
way of an issuance of shares of the Company (the "New
Shares") each with one warrant attached (the "Warrants
#2" and together with the New Shares, the "ABSAs").
Main terms of the Rights Issue
The Rights Issue will result in the creation of
71,932,731 ABSAs, at a subscription price of €1.56 per share (i.e.
€0.01 nominal and €1.55 share premium) representing a maximum gross
product (including share premium) of €112,215,060.36 (assuming that
the Rights Issue is fully subscribed in cash).
Each shareholder of CGG will receive one Right
for each share recorded in its securities account (enregistrement
comptable) at the end of the fiscal day on January 17, 2018. The
ABSA subscription will be made at the subscription price of €1.56
per ABSA (i.e. €0.01 nominal and €1.55 share premium), four Rights
allowing their holder to subscribe for 13 ABSAs irreducibly.
Subscriptions on a reducible basis will be
admitted but may be reduced in the event of oversubscription of the
Rights Issue in excess of 71,932,731 ABSAs. The ABSAs not
subscribed on an irreducible basis will be allocated to holders of
Rights who have placed orders on a reducible basis and allocated
among them subject to such reduction.
The Rights Issue will be open to the public in
France only and in private placements to institutional investors
outside of France.
Key characteristics of the Warrants
#2
The Warrants #2 will be securities giving access
to the share capital within the meaning of articles L. 228-91 et
seq. of the French Code de commerce. The exercise of Warrants #2
allows the subscribers of the ABSAs (or their transferees) to take
part in the recovery of the sector if CGG's share price exceeds
€4.02 per share.
One (1) Warrant #2 will be attached to each New
Share. Upon issuance, each Warrant #2 will be detached from the New
Share to which it was originally attached.
The Warrants #2 will be listed on Euronext Paris
separately from the existing shares of the Company, under the ISIN
code FR0013309622.
Three (3) Warrants #2 will entitle their holder
to subscribe to two (2) new shares (the "Exercise Ratio"),
for a subscription price of €4.02 per new share (the holders having
to exercise their Warrants #2 by multiples of three) during a
period of five years from the date on which all of the transactions
involved in the Company's financial restructuring are implemented.
This date will be the subject of a press release.
The Exercise Ratio may be adjusted as a result
of transactions that the Company implements following the issuance
of the Warrants #2 (scheduled for February 21, 2018), in accordance
with applicable French laws and regulations and in compliance with
contractual provisions, to protect the rights of holders of
Warrants #2 (no adjustment will be made as a consequence of the
securities issuances contemplated in the financial restructuring
plan).
The new shares issued upon the exercise of the
Warrants #2 will be ordinary shares of the Company of the same
class as the existing shares. They will entitle their holders to
all rights attached to them from their date of issue and to all
distributions decided by the Company after that date and
applications will be submitted periodically to have them admitted
to trading on Euronext Paris under the same quotation line as
existing shares (ISIN code: FR0013181864).
Conditions to the settlement and
delivery
The transactions provided for under the
safeguard plan and the Chapter 11 plan (including the Rights Issue)
shall be regarded as a whole so that if one of them cannot be
implemented, none of them will be implemented. The settlement and
delivery of the Rights Issue must occur (i) before February 28,
2018 (or any later date as may be determined in accordance with the
terms of the Lock-Up Agreement entered into by the Company on June
13, 2017 (the "Lock-Up Agreement") and the restructuring
support agreement which provides for the backstop commitment of
DNCA Invest and the entities managed by DNCA Finance (the "DNCA
Entities") (the "Restructuring Support Agreement") and
(ii) concurrently with the settlement and delivery of the other
securities to be issued by the Company in connection with the
Company's restructuring plan.
The settlement and delivery of the Rights Issue
and, more generally, the completion of the financial restructuring
plan, remain subject to the satisfaction (or waiver) prior to the
settlement and delivery of the Rights Issue, of certain conditions
precedent set forth in the private placement agreement dated June
26, 2017 (the "Private Placement Agreement") and in the
preparatory documents for the issuance of the New First Lien Notes
and the Second Lien Notes (the "Preparatory Documents"). In
addition, persons who have committed to subscribe to the Second
Lien Notes in the context of the Private Placement Agreement have
the right, under certain conditions, to terminate such agreement
prior to the settlement and delivery of the Rights Issue. The
Restructuring Support Agreement providing for the backstop
commitment of the DNCA Entities of the Rights Issue may be
terminated under certain conditions, prior to the settlement and
delivery of the Rights Issue.
The settlement and delivery of the Rights Issue,
as well as the transactions provided for in the Company's financial
restructuring plan might not be implemented in the following
cases:
- the breach of any representation and warranty or any covenant
made by the Company or certain of its subsidiaries pursuant to the
Private Placement Agreement, in each case in any material
respects;
- the absence of execution or delivery of the final documentation
related to the issuance of the New First Lien Notes and the Second
Lien Notes;
- the occurrence or existence of any event having individually or
in the aggregate a Material Adverse Effect (as such term is defined
hereafter);
- a decision of a competent court or authority restraining or
otherwise preventing the implementation of all or part of the
Company's financial restructuring plan;
- an insolvency event of the Company or certain of its
subsidiaries (except as resulting from the Company's financial
restructuring plan);
- a default under the Secured Loans or Senior Notes
documentation, provided that such default has not been waived;
- a material breach of the Lock-Up Agreement by the Company or
certain of its subsidiaries, any of the Senior Noteholders or any
of the Secured Lenders, if such breach is not cured or remedied
within five business days; or
- a material breach of the Restructuring Support Agreement by the
Company that would have a significant adverse impact on the
implementation or completion of the Company's financial
restructuring plan, if not cured within 5 business days.
In the event that the settlement and delivery of
the Rights Issue is not implemented, investors that acquired Rights
on the market would have acquired rights that are no longer valid,
leading them to incur a loss equal to the purchase price of such
Rights. In addition, if the Rights Issue is not implemented, the
subscriptions to the Rights Issue will be cancelled and the amount
of subscription prices paid will be returned without interest to
the subscribers by the authorized intermediaries.
Subscription commitments and
intentions
Apart from the backstop commitment of the DNCA
Entities described below in the amount of approximately €71.39
million to be paid in cash, the Company is not aware of the
intentions of shareholders or the members of the Company's board of
directors or management bodies in connection with the Rights
Issue.
Backstop
In accordance with the Company's financial
restructuring plan, the portion of the Rights Issue not subscribed
by the holders of Rights on an irreducible and on a reducible basis
will be subscribed:
- by the DNCA Entities in an amount of up to €71,390,326.24 in
cash;
- by the holders of Senior Notes (if needed after first
implementing the backstop commitment from the DNCA Entities set
forth above), by way of set-off on a pro rata basis against the
face value of part of their claims under the Senior Notes.
The backstop commitment in cash by the DNCA
Entities will be compensated by a fee equal to 10% of the amount
committed (approximately €7.14 million), which will be paid in
cash, whether or not their backstop commitment is actually
implemented. However, no compensation or fee will be paid in
respect of such backstop commitment if any of the steps of the
Company's financial restructuring plan are not completed. No fee
will be paid in respect of the backstop commitment of the holders
of Senior Notes.
The backstop commitments referred to above
relate to the entire Rights Issue but do not constitute a
performance guarantee (garantie de bonne fin) within the meaning of
Article L. 225-145 of the French Commercial Code. They may, under
certain conditions, be terminated prior to the settlement and
delivery of the Rights Issue.
Use of the proceeds
The funds raised in cash from the Rights Issue
and the issue of the Second Lien Notes (net of backstop and
commitment fees and other costs, expenses or fees related thereto)
will be used as follows:
- first, up to $250 million[1], to provide for CGG group's
financial and operating needs (including (i) the payment of accrued
interest under the Convertible Bonds that has not been equitized in
the context of the issue of Creditor Shares 1 (i.e. an amount of
approximately €4.46 million), and (ii) the payment of
restructuring-related fees and expenses other than the backstop
fees and expenses and all other fees relating to the Rights Issue
and the issue of the Second Lien Notes);
- secondly, to make the initial repayment, on a pro rata basis,
to the secured lenders holding senior first lien secured claims on
American subsidiaries of the CGG group, the amount of such
repayment being limited to a maximum of $150 million in
aggregate;
- the balance would be kept by the Company to cover (i) its
financial needs (including the payment of restructuring-related
fees and expenses other than, inter alia, subscription and backstop
fees and expenses) and (ii) any delay in the group's
redeployment.
.
Timetable of the Rights Issue
The subscription period of the Rights Issue will
begin on January 22, 2018 and end on February 2, 2018 at the end of
the trading session. The listing and trading of the Rights on
Euronext Paris (ISIN code FR0013310265) will begin on January 18,
2018 and will end on January 31, 2018 at the end of the trading
session. The Rights that are not exercised before the end of the
subscription period, i.e. before February 2, 2018 at the end of the
trading session, will automatically lapse.
The settlement and delivery and the admission to
trading on Euronext Paris of the New Shares and the Warrants #2 are
scheduled for February 21, 2018. The New Shares will entitle their
holders to all rights attached to them, from their date of issue,
and to all distributions decided by the Company after that
date.
The New Shares will be immediately assimilated
to the existing CGG shares and will trade on the same quotation
line as the existing shares under ISIN code FR0013181864. The
Warrants #2 will be quoted separately under the ISIN code
FR0013309622.
For the purpose of this press release:
"Convertible Bonds" means, together, (i)
the convertible bonds (obligations à option de conversion et/ou
d'échange en actions nouvelles ou existantes), bearing interest at
a rate of 1.75% and maturing on January 1, 2020, issued by the
Company on June 26, 2015, and (ii) the convertible bonds
(obligations à option de conversion et/ou d'échange en actions
nouvelles ou existantes), bearing interest at a rate of 1.25% and
maturing on January 1, 2019, issued by the Company on November 20,
2012;
"Material Adverse Effect" means any
material adverse effect or material adverse change in (a) the
ability of the Company or its group to implement or complete the
financial restructuring plan by February 28, 2018 or such other
date as may be determined in accordance with the Lock-Up Agreement
and the Restructuring Support Agreement; or (b) the consolidated
financial position, assets or business of the Company and its
controlled subsidiaries, taken as a whole, in each case unless it
arises out of, results from, or is attributable to the signature,
announcement or execution of the Private Placement Agreement, the
Lock-Up Agreement or the Restructuring Support Agreement (as
applicable) or other documents relating to the restructuring or
transactions contemplated herein or in such documents, including
the financial restructuring plan;
"New First Lien Notes" means the new
first lien notes to be issued by CGG Holding (U.S.) Inc., in
connection with the safeguard plan in exchange for claims under the
Secured Loans not repaid in cash;
"Second Lien Notes" means a new notes
issuance in an amount of $375 million by way of an issuance by the
Company of new high yield second-lien notes governed by New York
law;
"Secured Lenders" means the lenders under
the facilities comprising the Secured Loans; and
"Senior Notes" means, together, (i) the
high yield notes, bearing interest at a rate of 5.875% and maturing
in 2020, issued by the Company on April 23, 2014, (ii) the high
yield notes, bearing interest at a rate of 6.5% and maturing in
2021, issued by the Company on May 31, 2011, January 20, 2017 and
March 13, 2017, and (iii) the high yield notes, bearing interest at
a rate of 6.875% and maturing in 2022, issued by the Company on May
1, 2014.
About CGG:
CGG (www.cgg.com) is a fully integrated
Geoscience company providing leading geological, geophysical and
reservoir capabilities to its broad base of customers primarily
from the global oil and gas industry. Through its three
complementary businesses of Equipment, Acquisition and Geology,
Geophysics & Reservoir (GGR), CGG brings value across all
aspects of natural resource exploration and exploitation. CGG
employs around 5,300 people around the world, all with a Passion
for Geoscience and working together to deliver the best solutions
to its customers.
CGG is listed on the Euronext Paris SA (ISIN:
0013181864) and the New York Stock Exchange (in the form of
American Depositary Shares. NYSE: CGG).
Contacts
Group
CommunicationsChristophe BarniniTel: + 33 1 64 47 38 11E-Mail:
: invrelparis@cgg.com |
Investor RelationsCatherine LeveauTel: +33 1 64 47 34
89E-mail: : invrelparis@cgg.com |
Notice
This announcement does not, and shall not, in
any circumstances constitute a public offering of securities or an
invitation to the public in connection with any offer.
The distribution of this document may be
restricted by law in certain jurisdictions. Persons into whose
possession this document comes are required to inform themselves
about and to observe any such restrictions. Any failure to comply
with these restrictions may constitute a violation of the
securities laws of any such jurisdiction.
This announcement is an advertisement and not a
prospectus within the meaning of Directive 2003/71/EC of the
European Parliament and of the Council of
4 November 2003, as amended (the "Prospectus
Directive").
With respect to the member States of the
European Economic Area which have implemented the Prospectus
Directive, no action has been undertaken or will be undertaken to
make an offer to the public of the securities referred to herein
requiring a publication of a prospectus in any relevant member
State. As a result, the securities may not and will not be offered
in any relevant member State except in accordance with the
exemptions set forth in Article 3(2) of the Prospectus
Directive, if they have been implemented in that relevant member
State, or under any other circumstances which do not require the
publication by CGG of a prospectus pursuant to Article 3 of the
Prospectus Directive and/or to applicable regulations of that
relevant member State.
This document is not an offer of securities for
sale nor the solicitation of an offer to purchase securities in the
United States of America or any other jurisdiction where such offer
may be restricted. Securities may not be offered or sold in the
United States of America absent registration under the U.S.
Securities Act of 1933, as amended
(the "Securities Act"), or an exemption from
registration. The securities of CGG described herein have not been
and will not be registered under the Securities Act, and CGG does
not intend to make a public offer of its securities in the United
States of America.
This document is only being distributed to, and
is only directed at (i) persons who are outside the United Kingdom,
(ii) persons in the United Kingdom that are "investment
professionals" falling within Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005 (as
amended) of the United Kingdom (the "Order"), (iii) persons
who fall within Article 49(2)(a) to (d) ("high net worth
companies, unincorporated associations, etc.") of the Order, or
(iv) any other persons to whom an invitation or inducement to
engage in investment activity (within the meaning of
Article 21 of the Financial Services and Markets Act 2000) in
connection with the issue or sale of any securities may otherwise
lawfully be communicated or caused to be communicated (all such
persons together being referred to as "Relevant Persons").
This document is directed only at Relevant Persons and must not be
acted on or relied on by persons who are not Relevant Persons. Any
investment or investment activity to which this document relates is
available only to Relevant Persons and will be engaged in only with
Relevant Persons. Any person other than a relevant person should
not act or rely on this document or any of its contents.
[1] This amount being
converted into euro on the basis of the exchange rate provided for
in the safeguard plan, i.e. EUR 1 = USD 1.1206.
Attachments:
http://www.globenewswire.com/NewsRoom/AttachmentNg/d614c2bf-7cb7-49b1-a439-4caf3bc49fc8
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