PARIS–CGG has begun legal processes to implement a comprehensive pre-arranged restructuring, with the opening of a safeguard proceeding in France and Chapter 11 and Chapter 15 filings in the US. The geosciences giant has executed the legally binding agreements in support of the terms of the agreement-in-principle with key financial creditors announced earlier this month.
The Paris Commercial Court issued a judgement opening safeguard proceedings in respect of CGG SA, the group parent company. CGG SA also filed a petition under Chapter 15 of the US Bankruptcy Code with the Bankruptcy Court of the Southern District of New York, seeking recognition in the US of the Sauvegarde as a foreign main proceeding. Fourteen direct and indirect subsidiaries (US and non-US), filed voluntary petitions for reorganization under chapter 11 of the US Bankruptcy Code in the Bankruptcy Court of the Southern District of New York.
CGG 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.
Jean-Georges Malcor, CEO, hailed what he called “major step today for its comprehensive financial restructuring plan” and said that the company will continue normal business operations during this process. He also said that the restructuring transactions “will not affect relationships with our clients, business partners, vendors or employees” and that “the restructuring plan meets our objectives of substantially reducing the debt on our balance sheet while preserving the integrity of the CGG Group.”
In conjunction with the legal proceedings in the US and France,CGG and certain of its financial creditors entered into a lock-up agreement on June 13 under 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,” the company said in a statement.
Under 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.