Paris Team Advises DNCA on CGG’s $2.7 Billion Restructuring

March.19.2018

Orrick's Paris restructuring team advised DNCA, one of the largest shareholders and bondholders of CGG SA, a French-listed company, in its $2.7 billion restructuring.

We advised DNCA in connection with the debt restructuring and the set-up of the new governance of French geoscience company CGG, listed on Euronext Paris. This transaction has been one of the largest restructurings in Europe and France since Eurotunnel. 

A restructuring agreement was first negotiated among CGG, an ad hoc committee of its senior secured lenders, the high-yield bondholder steering committee and DNCA, and was then implemented through:

  • in relation to CGG, the opening of French safeguard proceedings (procedure de sauvegarde) before the commercial court of Paris and Chapter 15 proceedings before the U.S. Bankruptcy Court of the Southern District of New York; and
  • in relation to most (non-French) debtors and guarantors, the opening of Chapter 11 proceedings before the U.S. Bankruptcy Court of the Southern District of New York (namely CGG Holding BV, CGG Marine BV, CGG Holding I (UK) Ltd, CGG Holding II (UK) Ltd, CGG Holding (US) Inc., CGG Services (US) Inc., Alitheia Resources Inc., Viking Maritime Inc., CGG Land (US) Inc., Sercel Inc., Sercel-GRC Corp, CGG Marine Resources Norge AS, CGG Canada Services Ltd and Sercel Canada Ltd).

Under the deal, bondholders swapped nearly $2 billion in debt for most of the equity in the reorganized company. The restructuring also resulted in the issuance of $355 million and €80.4 million of second lien secured notes, a share capital increase in cash of €112 million and a refinancing of $810 million senior secured debt.

This was a highly complex matter, given the number of stakeholders and the diversity of debt and hybrid (debt and equity linked) instruments issued by CGG. The complexity was increased by the social and political background and tension due to a large number of employees at stake in France and overseas.

Despite the many challenges, the restructuring was successfully completed with the support of DNCA, which strongly pushed for the adoption of CGG’s recovery and turnover plan. In addition, DNCA backstopped the terms of the financial restructuring and backed CGG in defending the Safeguard plan challenged by the minority creditors before the court. 

Our team was led by Saam Golshani and included Alexis Hojabr and Aurélien Loric on restructuring aspects; Alexis Marraud des Grottes and Julien Beloeil on securities law aspects; and Frédéric Lalance and Emmanuel Avramesco on litigation aspects.