French geophysical services company CGG has filed for bankruptcy as part of financial restructuring process to reduce its $3 billion debt.
The company informed on Wednesday 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 had started 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.
A “procédure de sauvegarde” is a French judicial procedure to facilitate a company’s restructuring while ensuring the continuation of its operations and the protection of its business, the safeguarding of jobs and the discharge of its liabilities. This process is reserved for companies with financial difficulties that can demonstrate they are cash-flow solvent.
CGG will now seek an agreement with the required majorities of creditors and, 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, the company explained.
The geophysical company expects to continue its normal day-to-day operations during the processes in France and the U.S.
Upon emergence from bankruptcy, 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.
Jean-Georges Malcor, CEO of CGG said: “CGG has accomplished a major step today for its comprehensive financial restructuring plan. The June 2, 2017 agreement-in-principle with our main creditors and DNCA has been signed and the restructuring plan meets our objectives of substantially reducing the debt on our balance sheet while preserving the integrity of the CGG Group.”
Malcor added: “We expect that our financial restructuring can move forward quickly to strengthen our balance sheet and to position the company well for the future.”
Offshore Energy Today Staff