CGG Announces Exchange Offer In Relation To Its 7 3/4% Senior Notes Due 2017, 6 1/2% Senior Notes Due 2021 And 6 7/8% Senior Notes Due 2022

Nov 19, 2015, 02:30 ET from CGG Holding (U.S.) Inc.

PARIS, Nov. 19, 2015 /PRNewswire/ -- CGG Holding (U.S.) Inc. ("CGG US"), an indirect subsidiary of CGG S.A. (the "Issuer" and together with its subsidiaries, "CGG"), today announced that it has commenced an exchange offer for (i) any and all of the Issuer's outstanding 7 3/4% Senior Notes due 2017 (CUSIP 204386AK2 / ISIN US204386AK24) (the "2017 Notes") and (ii) up to $135,000,000 combined aggregate principal amount of the Issuer's outstanding 6 1/2% Senior Notes due 2021 (CUSIP 204384AB7 / ISIN US204384AB76) (the "2021 Notes") and 6 7/8% Senior Notes due 2022 (CUSIP 12531TAB5 / ISIN US12531TAB52; CUSIP F1704UAC8 / ISIN USF1704UAC83; CUSIP 12531TAA7 / ISIN US12531TAA79) (the "2022 Notes", together with the 2017 Notes and the 2021 Notes, collectively, the "Notes").

Exchange Offer

As described in the table below, CGG US is offering to exchange Notes for senior secured term loans (the "Term Loans") and, if applicable, cash (the "Exchange Offer"). The Term Loans will mature on May 15, 2019 and bear an interest, at the option of CGG US, of adjusted LIBOR plus 5.50% per annum or adjusted base rate plus 4.50% per annum. Adjusted LIBOR shall not be less than 1.00% and adjusted base rate shall not be less than 2.00%.

Notes to be Exchanged

CUSIP / ISIN

Outstanding Aggregate Principal Amount

Total Consideration Amount for each $1,000 Principal Amount of Notes Tendered at or Prior to the Early Tender Time(1)(2)

Exchange Consideration Amount for each $1,000 Principal Amount of Notes Tendered After the Early Tender Time(2)

7 3/4% Senior Notes due 2017(3)

204386AK2 / US204386AK24

$135,000,000

$1,000 principal amount of Term Loans (to the extent the holder concurrently tenders a corresponding equal principal amount of  2021 Notes or 2022 Notes)

OR

$1,000 principal amount of Term Loans plus $50 cash (to the extent the holder does not concurrently tender any 2021 Notes or 2022 Notes)

$950 principal amount of Term Loans (to the extent the holder concurrently tenders a corresponding equal principal amount of  2021 Notes or 2022 Notes)

OR

$950 principal amount of Term Loans plus $50 cash (to the extent the holder does not concurrently tender any 2021 Notes or 2022 Notes)

6 1/2% Senior Notes due 2021(4)

204384AB7 / US204384AB76

$650,000,000

$1,000 principal amount of Term Loans (subject to footnote 4 below)

$950 principal amount of Term Loans (subject to footnote 4 below)

6 7/8% Senior Notes due 2022(4)

 

12531TAB5 / US12531TAB52

 

F1704UAC8 / USF1704UAC83

 

12531TAA7 / US12531TAA79

 

$500,000,000

$1,000 principal amount of Term Loans (subject to footnote 4 below)

$950 principal amount of Term Loans (subject to footnote 4 below)

(1) An Eligible Holder of Notes will only be eligible to receive the Total Consideration if it validly tenders (and does not withdraw) Notes at or prior to the Early Tender Time.

(2) Accrued but unpaid interest on Notes exchanged in the Exchange Offer up to, but not including, the Settlement Date will be paid in cash in full to participating holders on the Settlement Date.

(3) If the principal amount of 2017 Notes tendered by an Eligible Holder is greater than the combined principal amount of 2021 Notes and 2022 Notes concurrently tendered by such holder, the excess 2017 Notes will receive Term Loans and cash. Tenders of 2017 Notes and 2021 Notes or 2022 Notes are concurrent if all are such Notes are tendered either (i) prior to the Early Tender Time or (ii) after the Early Tender Time and prior to the Expiration Time.

(4) 2021 Notes and 2022 Notes are only eligible to be accepted for exchange if accompanied by the concurrent tender of an equal or greater principal amount of 2017 Notes by the Eligible Holder. Any tenders of 2021 Notes or 2022 Notes must be accompanied by the tender of an equal or greater principal amount of 2017 Notes, and only up to a combined maximum of 2021 Notes and/or 2022 Notes will be accepted pursuant to the Exchange Offer.

The Term Loans will be made pursuant to the term loan credit agreement (the "Term Loan Credit Agreement"), entered into on November 19, 2015, between, among others, CGG US, as borrower and CGG S.A., as parent. Holders that tender their Notes will become lenders under the Term Loan Credit Agreement.

Notes that are accepted for exchange will be cancelled. The terms and conditions of the Exchange Offer are detailed in an Offer to Exchange Statement dated the date hereof (the "Offer to Exchange Statement"). Capitalized terms used but not defined herein shall have the meanings ascribed to those terms in the Offer to Exchange Statement.

Key Dates

The Exchange Offer is being made on the terms and subject to the conditions contained in the Offer to Exchange Statement, and is subject to the restrictions set out therein. The Exchange Offer commences the date hereof, and will expire at 11:59 p.m., New York City time, on December 17, 2015, unless extended or earlier terminated as described in the Offer to Exchange Statement (the "Expiration Time"). In order for Eligible Holders to receive the Total Consideration, such holders must validly tender their Notes for cancellation at or prior to 5:00 p.m., New York City time, on December 3, 2015, unless extended (the "Early Tender Time"). Notes may be withdrawn at any time at or prior to 5:00 p.m., New York City time, on December 3, 2015, unless extended (the "Withdrawal Time"), but not thereafter. CGG US reserves the right to extend the Early Tender Time, the Expiration Time and the Withdrawal Time in its absolute and sole discretion. If the Early Tender Time is extended, the Expiration Time will be extended by an equal period.

Eligible Holders

The Exchange Offer is being made, and the Term Loans are being made available, only to holders of Notes that are banks or other institutional lenders and are either (i) "qualified institutional buyers" (as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act")) or (ii) a non-"U.S. Person" (as defined in Regulation S under the Securities Act) outside of the United States (collectively, the "Eligible Holders"). The ability of any Eligible Holder (or designee) to receive Term Loans that is not a pre-existing customer of the administrative agent under the Term Loan Credit Agreement must clear customary account creation and administrative requirements and approvals (including "know your customer" requirements) to participate in the Exchange Offer.

Copies of the Offer to Exchange Statement

The Offer to Exchange Statement and associated documentation are being made available only to Eligible Holders. To receive a copy of the Offer to Exchange Statement and associated documentation, holders of the Notes must access, complete and return an eligibility letter available at www.dfking.com/cgg.

Any persons with questions regarding the Exchange Offer or the Offer to Exchange Statement should contact the Information and Exchange Agent at the contact details below.

Other Transactions

CGG also anticipates taking certain potential actions to refinance some of its other indebtedness.

On January 31, 2013, CGG acquired most of the Geoscience Division of Fugro N.V. ("Fugro") pursuant to a Sale and Purchase Agreement dated September 23, 2012, as amended ("Fugro SPA"). To facilitate that acquisition, Fugro made a €125 million vendor loan to CGG S.A., which was subsequently increased to €225 million (the "Fugro Loan"). CGG S.A. has repaid €140.6 million of the Fugro loan. The remaining amount of €84.4 million remains outstanding. CGG S.A. is currently in discussions with Fugro about the possible exchange of the Fugro Loan for participations in Term Loans. Those discussions may not result in any agreement with Fugro and, if any agreement is reached, the timing of any such agreement is not known at this time.

On July 15, 2013, CGG US entered into a U.S. revolving credit facility (the "US RCF") of up to $165 million with a 5-year maturity and on July 31, 2013, CGG S.A. entered into a French revolving credit facility (the "French RCF") of up to $325 million with a 3-year maturity with two extension options of one year each. The terms of the Term Loan Credit Agreement limit the commitments under the US RCF and French RCF to the commitments as of the date hereof ($165,000,000 and $325,000,000, respectively). CGG may seek to reduce the amount of the commitments under the US RCF and the French RCF lenders by having one or more of the lenders under the US RCF and/or French RCF become lenders under the Term Loan Credit Agreement. In such event, it is expected that the US RCF and the French RCF would be kept in place for future potential drawings but would be correspondingly reduced by the amount of the loans held by such lenders under the Term Loan Credit Agreement.

The maximum aggregate principal amount of Term Loans permitted to be incurred under the Term Loan Credit Agreement is $500 million if certain of the foregoing transactions were to occur, consisting of Term Loans incurred pursuant to the Exchange Offer, Term Loans to US RCF and French RCF lenders who become lenders under the Term Loan Credit Agreement and whose US RCF and French RCF commitments are permanently reduced, Term Loans incurred in exchange for amounts owed under the Fugro Loan, as well as any other refinancing transactions which are permitted under the Term Loan Credit Agreement. Therefore, the aggregate principal amount of indebtedness secured on a pari passu basis by the same assets as the Term Loans, including any outstanding US RCF and French RCF commitments, will not exceed $890 million.

CGG announced on November 5, 2015 that it plans to finance the group's needs, including in connection with its transformation plan, through the disposal of non-core assets and an equity offering or the sale of a minority interest. CGG expects to decide which of these two options it will pursue shortly after the Early Tender Time and the Withdrawal Time.

CGG currently anticipates that, if the equity offering option is pursued, it will yield sufficient proceeds to cover funding needs and the transformation plan through the medium term. Any equity offering undertaken will likely be subject to conditions, including the receipt of shareholder approval. CGG's ability to successfully complete such offering will depend on various factors, many of which are outside the control of the group, including market conditions prevailing at the time. Accordingly, CGG may not be able to complete any such equity offering, and any proceeds raised in such offering may be less than the targeted amount. Conversely, CGG may raise additional amounts in any such offering that would be available for other uses.

CGG may not be able to complete any of these transactions, or the transactions may be completed on terms substantially differing from those described above.

Announcement for Information Purposes Only

This announcement is for information purposes only and is neither an offer to exchange nor a solicitation of an offer to exchange any security. No recommendation is being made as to whether holders of the Notes should exchange Notes for Term Loans. The Exchange Offer is not being made in any jurisdiction in which, or to or from, any person to or from whom, it is unlawful to make such an Exchange Offer under applicable state or foreign securities or "blue sky" laws.

Contact information of Exchange and Information Agent:

D.F. King & Co., Inc.   
48 Wall Street, 22nd Floor  
New York, NY 10005  
USA

For information by telephone: Bankers and Brokers call (001) (212) 269-5550; all others call Toll-Free (001) (866) 829-1035  
Email: cgg@dfking.com

Statements included in this announcement that are not a description of historical facts are forward-looking statements that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause CGG's  results to differ materially from historical results or those expressed or implied by such forward-looking statements. There can be no assurance that the transactions contemplated in this announcement will be completed. CGG assumes no obligation to update any forward-looking statement included in this announcement to reflect events or circumstances arising after the date on which it was made.

This press release does not constitute an offer to sell or a  solicitation of an offer to purchase any securities in any jurisdiction. The Exchange Offer is not being made to, and no tenders are being solicited from, holders or beneficial owners of the Notes in any jurisdiction in which it is unlawful to make such Exchange Offer or grant such tenders. The making of the Exchange Offer, may be restricted by law in some jurisdictions. Persons into whose possession the Offer to Exchange Statement comes must inform themselves about and observe these restrictions.

The Exchange Offer shall not be considered an "offer of securities to the public" for purposes of Luxembourg law, or give rise to or require a prospectus in a European Economic Area member state which has implemented the European Union Prospectus Directive (2003/71/EC), as amended.

SOURCE CGG Holding (U.S.) Inc.