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Viridien — CGG — Debt Investor Presentation (June 2017)
29 slides from Viridien's debt investor presentation, Jun 2, 2017
Slide 1: Agreement in Principle on Financial Restructuring
Agreement in Principle on Financial Restructuring June 2nd, 2017
Slide 2: Disclaimer
Disclaimer 7 This presentation has been prepared by CGG S.A. (“CGG”) in the context of the negotiations between it and certain of its creditors and other stakeholders in respect of a potential restructuring plan. It is not intended for, and may not be used for, any other purposes. This document cont
Slide 3: Agenda
Agenda Agreement in Principle Characteristics of the group after the financial restructuring Conclusion and timetable 8
Slide 4: Agreement in Principle
Agreement in Principle ccc ¢gg.com Passion for Geoscience
Slide 5: Restructuring discussions: positive outcome
Following the May 12th announcement, the Company has reengaged, under the aegis of the Mandataire Ad Hoc, in restructuring discussions with its main creditors and DNCA The “Secured Lenders Coordinating Committee”1 = 52.7% principal amount The “HYB ad hoc Committee”2 = 52.4% principal amount DNCA = 7
Slide 6: Reminder: CGG's Priorities
Reminder: CGG’s Priorities Protect the corporate interest of the Company and the full value of its businesses Timetable to deliver the targeted Financial Restructuring is of the essence in the present market environment Preserve the Group’s integrity Highly interlinked technologies, Production Units
Slide 7: Financial Restructuring objectives met
Financial Restructuring objectives met 12 Legacy Maritime Liabilities and Nordic Debt fully addressed in Q1 Full Equitization of the principal amount of the unsecured debt leading to substantial Group deleveraging Extension of the maturity of the secured debt to 2022 (5 years from restructuring clos
Slide 8: Key differences from Company's Proposal dated May 12th
Key differences from Company’s Proposal dated May 12th 13 Key differences in Debt Equitization Conversion price of the High Yield Bonds: $3.5 vs $4 in May 12 proposal Conversion price of the Convertible Bonds: $11.5 vs $15 in May 12 proposal Accrued High Yield Bond coupon to be paid on closing throu
Slide 9: Agreement in Principle: Equitization of the Unsecured Debt
Agreement in Principle: Equitization of the Unsecured Debt 14 Summary of Main Economic Terms Treatment of the Unsecured Debt Coupon HYB: $86m accrued and unpaid interest to be paid on closing with new HY Bonds CB: $5m accrued and unpaid interest to be paid on closing in cash Reserved Capital Increas
Slide 10: Agreement in Principle: New Money
Agreement in Principle: New Money 15 Summary of Main Economic Terms $125m Rights Issue with Warrants (ABSA) limited to Existing Shareholders Issuing New Shares at $1.75 coupled with Warrants #2 at $4.5 / 5 year maturity 2 Warrants for 3 New Shares Open to all existing shareholders (before equitizati
Slide 11: Agreement in Principle: reinstated secured debt
Reinstatement of the outstanding c. $800m US and French Revolving Credit Facility + Term Loan B Up to $150m prepaid at Closing Secured Bond format 5 year maturity Libor (floor 1%) + 6.5% cash / 2.5% PIK No maintenance covenant except $185m minimum cash and cash equivalent Basket for up to $200m addi
Slide 12: Agreement in Principle: Indicative Equity Ownership
17 Shareholding Pre New Money (Pre Penny Warrants) Post Debt Equitisation Including Warrants 1 Existing shareholders 4,5% 10,0% Convert. Bonds 6,7% 6,4% HYB 88,7% 83,7% Total 100% 100% Shareholding Post New Money Post Debt Equitisation Including Warrants 1 Including Warrants 2 Existing shareholders
Slide 13: Characteristics of the group after the financial restructuring
Characteristics of the group after the financial restructuring
Slide 14: Industrial restructuring: fully achieved
Industrial restructuring: fully achieved Source:Company Full cost base including Depreciation and Amortization Including Manufacturing temporaries Excluding impact of variation in fixed asset suppliers Headcount(2) Total Capex(3) Marine monthly cost structure(1) (61)% G&A expenses (number of employe
Slide 15: Business mix evolution
2013A Mid-term Objective Business mix evolution 2016A Total revenue: $1.2 BN Total revenue: ~$2.0 BN Total revenue: $3.8 BN 20
Slide 16: Business plan: selected financial targets
Business plan: selected financial targets FYE 31/12 2016A 2017E 2018E 2019E Revenue $1.2 BN In line with 2016A results ~$1.5 BN ~$2.0 BN EBITDA Margin (1) 27.4% 35.0% - 40.0% 37.5% - 42.5% MC Capex $295m $275 – 325m Industrial Capex $71m $100 – 125m R&D Capex $34m Stable at c.$35m Change in Working
Slide 17: Group Leverage: back below 1.5x beginning of 2018
Based on mid-point of Business Plan targets, post Restructuring, Net Financial Debt* over EBITDA ratio below the 1.5x area * Here-shown excluding Capital Lease Group Leverage: back below 1.5x beginning of 2018 22
Slide 18: Restructuring Savings (over 2017-2019)
Restructuring Savings (over 2017-2019) ML mitigation & Nordic Loan: c. $300m Cost of Debt reduction net of fees: c. $200m Additional Liquidity Net New Money: c. $300m Basket for new Secured debt: c. $200m Group Liquidity: $1bn improvement at YE 2019 horizon 23
Slide 19: Debt profile post financial restructuring
Debt profile post financial restructuring From $2.75bn before Restructuring to $1.15bn post restructuring Maturities extended to 2022 and 2023 Average cost of debt at 7.0% cash + 5.0% PIK c. $80m cash burden in 2018 24
Slide 20: Conclusion and timetable
Conclusion and timetable Passion for Geoscience
Slide 21: Next Steps
Next Steps 26 Finalize legal documentation including lock-up agreements by June 12th at the latest Agreement in principle is subject to final documentation as well as customary conditions Interest on the 6.5% Senior Notes due on June 1st 2017 Put on hold during the 30-day grace period Interest on th
Slide 22: Conclusion: financial objectives met
Conclusion: financial objectives met 27 In parallel with our financial restructuring process, we remain focused on our high level of services to our customers and quality of our integrated product offerings Legacy Maritime Liabilities and Nordic Debt fully addressed in Q1 Full Equitization of the pr
Slide 23: Passion for Geoscience
Passion for Geoscience
Slide 24: Agreement in Principle: key changes vs Company proposal dated 12 May 2017
Agreement in Principle: key changes vs Company proposal dated 12 May 2017 Company Proposal (12/05/2017) AGREEMENT IN PRINCIPLE (01/06/2017) HY Bondholders HYB amount of principal plus accrued and unpaid interest ($1,601m, if closing occurs by the end of October 2017) to be converted into Equity @ $4
Slide 25: Areas to Be Addressed: Headline Terms
Areas to Be Addressed Headline Terms Borrower CGG Holdings Inc. (US) Form Bond format NY Law Guarantors Adjusted guarantee package compared to existing package, reflecting release of following guarantors1: CGG MRN, CGG Holding UK I, CGG Holding UK II, Sercel Inc, Sercel GRC Additional guarantors to
Slide 26: Areas to Be Addressed: Headline Terms
Areas to Be Addressed Headline Terms Early Prepayment Callable at par (in whole but not in part) at any time during the first 6 months after Closing Date (for avoidance of doubt from end of month 3 the repayment will be inclusive of the 3% roll-over fee that will be PIKed) ; Non-call between months
Slide 27: Areas to Be Addressed: Headline Terms
Areas to Be Addressed Headline Terms Issuer CGG SA Format: US$ documentation consistent with existing US$ HYB Amount $375m in cash (i) USD Tranche and (ii) EUR Tranche in an amount to be agreed $86m from the payment of accrued and unpaid Coupon Ranking Adjusted guarantee package compared to existing
Slide 28: Areas to Be Addressed: Headline Terms
Areas to Be Addressed Headline Terms Call Year 1: 120% Year 2: 120% Year 3: 112.5% From Year 4: par Covenants Incurrence based covenants only, consistent with existing US$ HYB due 2022 subject to increase in baskets for operational purposes and flex for incurrence of $200m additional debt for new se
Slide 29: Thank you
Thank you THIS FORM 6-K REPORT IS HEREBY INCORPORATED BY REFERENCE INTO CGG’S REGISTRATION STATEMENT ON FORM S-8 (REGISTRATION STATEMENT NO. 333-150384, NO. 333-158684, NO. 333-166250, NO. 333-173638, NO. 333-188120 AND NO. 333-197785) AND SHALL BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT I