Viridien · EURONEXT:VIRI
Viridien — CGG — Debt Investor Presentation (May 2017)
59 slides from Viridien's debt investor presentation, May 12, 2017
Slide 1: Overview of the Business Plan & Financial Restructuring Proposal
Overview of the Business Plan & Financial Restructuring Proposal May 12, 2017
Slide 2: Disclaimer
Disclaimer 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 and only for those purposes. This document contains forward-looking statements, which invo
Slide 3: Agenda
Agenda 2017-2019 Business Plan Update on the Financial Restructuring Discussions Appendix
Slide 4: Update on Restructuring Discussions (1/2)
Update on Restructuring Discussions (1/2) CGG’s stakeholders have organized themselves into committees / ad hoc groups with legal and financial advisors to facilitate restructuring discussions An ad hoc group of two significant shareholders (Bpifrance Participations and AMS Energie) together represe
Slide 5: Update on Restructuring Discussions (2/2)
Update on Restructuring Discussions (2/2) Discussions have focused on the terms of a restructuring plan to address the capital structure constraints of the Company To date, the positions of the various stakeholders have not converged towards a proposal agreed by all parties. However, all the latest
Slide 6: 2017-2019 Business Plan
2017-2019 Business Plan Passion for Geoscience
Slide 7: Market Environment: new exploration cycle and oil price
Shortage in oil reserves triggering a new exploration cycle Unconventional: a strong swing factor Clear shortage in oil reserves expected by 2020 due to the current scant exploration efforts and the low rate of discoveries in the past few years Business plan anticipates a modest increase in explorat
Slide 8: Market Environment by Segment
Market Environment by Segment Geology, Geophysics & Reservoir: Resilient market in 2016, will remain impacted by the fall in E&P investments and by the diminished appetite for offshore exploration Multi-Client: A market under pressure, but demand increasing vs. contractual A more competitive landsca
Slide 9: Market Environment by Segment (cont'd)
Market Environment by Segment (cont'd) Equipment: after a 70% decline in two years, market now stabilizing No sign of an imminent upturn; however market could improve by 2018 Sercel’s market shares well preserved Marine equipment market will be driven by need to replace streamers reaching end of use
Slide 10: Value Creation in Geosciences
Value Creation in Geosciences Market Rebound of E&P Capex before the end of the decade Developing new oil & gas reserves needed Supply-side short-fall Exploration rebound before 2020 Enhancing the recovery of existing oil & gas fields required Key issue for existing oil producers of mature fields Mo
Slide 11: Strong Value in Keeping an Integrated Group
Strong Value in Keeping an Integrated Group to Provide Complete Geoscience Solutions to Our Customers Sercel (Equipment) Data Acquisition Subsurface Imaging & Reservoir Multi - Client CGG JVs (Argas, SBGS - acquisition in specific territories…) Supplier Product testing Intelligence on acquisition pa
Slide 12: CGG Strategy for Value Creation
CGG Strategy for Value Creation Industrial transformation plan completed with a new business mix : GGR 60%+, Equipment 20-25% and Data Acquisition 15-20% A more flexible company cost structure Sercel break-even point drastically lowered, leading to a high sensitivity to revenue increase Very limited
Slide 13: Selected Financial Targets
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 $295 MM $275 – 325 MM Industrial Capex $71 MM $100 – 125 MM R&D Capex $34 MM Stable at c.$35 MM Change in Working Cap
Slide 14: 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
Slide 15: Geology, Geophysics & Reservoir (GGR)
Geology, Geophysics & Reservoir (GGR) Multi-Client to be highly selective in terms of new programs in order to maintain a good pre-funding level above 70% Multi-Client growth expected from after sales which will be driven by StagSeis data in GOM, Brazilian licensing rounds and Mexico Subsurface Imag
Slide 16: Equipment
Equipment Sercel’s offering of products & technology is well placed to make the most of the upturn Agile industrial business model with low break even point Business mix average 60% land and 40% marine Middle East Land high channel count crew should come from 2018-2019 Marine to benefit from replace
Slide 17: Contractual Data Acquisition
Contractual Data Acquisition Marine 2017 boosted by Pemex and Kosmos surveys Price and volume could recover from 2018, depending on the supply side (some vessels could return) Land & Multi-Physics Land projects expected in Africa and emerging markets Multi-Physics benefiting from mining market rebou
Slide 18: Update on the Financial Restructuring Discussions
Update on the Financial Restructuring Discussions
Slide 19: Update on Restructuring Discussions
Update on Restructuring Discussions The Company has put forward a proposal that is in its corporate interest, preserves the Group’s integrity and provides a framework for long-term sustainability for the Company’s businesses, employees and customers. In addition, it offers to current shareholders an
Slide 20: Summary of Key Terms of Latest Proposals (1/10)
Summary of Key Terms of Latest Proposals (1/10) Stakeholder Agreement in principle on main economic terms 11 May 2017 supported by the Secured Lenders Coordinating Committee, DNCA and the Company HYB Ad Hoc Committee proposal dated 11 May 2017 Shareholders Free allocation of warrants to existing sha
Slide 21: Summary of Key Terms of Latest Proposals (2/10)
Summary of Key Terms of Latest Proposals (2/10) Stakeholder Agreement in principle on main economic terms 11 May 2017 supported by the Secured Lenders Coordinating Committee, DNCA and the Company HYB Ad Hoc Committee proposal dated 11 May 2017 New Money Total amount: between $400MM and $425 MM alloc
Slide 22: Summary of Key Terms of Latest Proposals (3/10)
Summary of Key Terms of Latest Proposals (3/10) Stakeholder Agreement in principle on main economic terms 11 May 2017 supported by the Secured Lenders Coordinating Committee, DNCA and the Company HYB Ad Hoc Committee proposal dated 11 May 2017 New Money (new high yield bonds terms and conditions) $3
Slide 23: Summary of Key Terms of Latest Proposals (4/10)
Summary of Key Terms of Latest Proposals (4/10) Stakeholder Agreement in principle on main economic terms 11 May 2017 supported by the Secured Lenders Coordinating Committee, DNCA and the Company HYB Ad Hoc Committee proposal dated 11 May 2017 Secured Debt Borrower: CGG Holding Inc (US) Form: bond f
Slide 24: Summary of Key Terms of Latest Proposals (5/10)
Summary of Key Terms of Latest Proposals (5/10) Stakeholder Agreement in principle on main economic terms 11 May 2017 supported by the Secured Lenders Coordinating Committee, DNCA and the Company HYB Ad Hoc Committee proposal dated 11 May 2017 HY Bonds Holders Full conversion into equity at $4.0 per
Slide 25: Summary of Key Terms of Latest Proposals (6/10)
Summary of Key Terms of Latest Proposals (6/10) Stakeholder Convertible Bonds Representative proposal 8 May 2017 The two shareholders proposal 11 May 2017 Shareholders Possibility to participate in the rights issue post conversion of the HY Notes and the Convertible Bonds (see New Money Section) Fre
Slide 26: Summary of Key Terms of Latest Proposals (7/10)
Summary of Key Terms of Latest Proposals (7/10) Stakeholder Convertible Bonds Representative proposal 8 May 2017 The two shareholders proposal 11 May 2017 New Money Amount : $350 MM, $2 per share (175 MM new shares) Participation : existing shareholders (22 MM shares) and new shareholders (313 MM sh
Slide 27: Summary of Key Terms of Latest Proposals (8/10)
Summary of Key Terms of Latest Proposals (8/10) Stakeholder Convertible Bonds Representative proposal 8 May 2017 The two shareholders proposal 11 May 2017 New Money (new high yield bonds terms and conditions) N/A New high yield bonds terms and conditions: same as Agreement in principle but : Coupon:
Slide 28: Summary of Key Terms of Latest Proposals (9/10)
Summary of Key Terms of Latest Proposals (9/10) Stakeholder Convertible Bonds Representative proposal 8 May 2017 The two shareholders proposal 11 May 2017 Secured Debt 5-year extension Same as Agreement in principle
Slide 29: Summary of Key Terms of Latest Proposals (10/10)
Summary of Key Terms of Latest Proposals (10/10) Stakeholder Convertible Bonds Representative proposal 8 May 2017 The two shareholders proposal 11 May 2017 HY Bonds Holders Full conversion into equity at $6 per share (266 MM new shares) Same as Agreement in principle except that : the differences re
Slide 30: Summary of Capital Structure and Ownership (1/4)
Summary of Capital Structure and Ownership Based on Proposals (1/4) Agreement in principle on main economic terms 11 May 2017 supported by the Secured Lenders Coordinating Committee, DNCA and the Company Shareholding Post New Money Post Debt Equitisation Including Warrants 1 Including Warrants 1 and
Slide 31: Summary of Capital Structure and Ownership (2/4)
Summary of Capital Structure and Ownership Based on Proposals (2/4) The two shareholders proposal dated 11 May 2017 Shareholding Post New Money Post Debt Equitisation Including Warrants 1 Including Warrants 1 and 2 Existing Shareholders 17,0% 21,3% 27,4% of which from new money 8,1% 7,7% 14,9% of wh
Slide 32: Summary of Capital Structure and Ownership (3/4)
Summary of Capital Structure and Ownership Based on Proposals (3/4) HYB Ad Hoc Committee proposal dated 11 May 2017 Shareholding Post New Money Post Debt Equitisation Including Warrants 1 Including Warrants 1 and 2 Existing Shareholders 10,3% 13,5% 18,6% of which from new money 6,4% 6,2% 11,7% of wh
Slide 33: Summary of Capital Structure and Ownership (4/4)
Summary of Capital Structure and Ownership Based on Proposals (4/4) Convertible Bonds Representative proposal 8 May 2017 Post New money (Assuming no Take-up) - POST WARRANTS Convert. HYB 71% Of which Backstop (in paper) Convert. Bonds 10% Existing shareholders 8% New Money Investors (assumed cash) 1
Slide 34: Liquidity Profile After the Proposed Restructured Plan
Liquidity Profile After the Proposed Restructured Plan Note: Based on Company’s business plan Reflects impact of Pemex accelerated factoring and terms of proposed restructuring plan Includes PIK on Unsecured Debt Starting May-17 Illustrative Liquidity Profile Post Transaction(1)(2)(3) $ MM Minimum O
Slide 35: A – Agreement in principle on main economic terms, May 2017
A – Agreement in principle on main economic terms dated 11 May 2017 supported by the Secured Lenders Coordinating Committee, DNCA and the Company
Slide 36: Company Proposal May 2017
Company Proposal 11 May 2017 ccc egg.com Passion for Geoscience
Slide 37: Disclaimer
Disclaimer 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 contai
Slide 38: Company Proposal: equitization of the Unsecured Debt
Company Proposal: equitization of the Unsecured Debt Summary of Main Economic Terms Reserved Capital Increase to HY Bondholders $1,601m to be converted into Equity (except for the portion potentially used in the backstop of the rights Issue) Exchange at Par for Shares at $4 Reserved Capital Increase
Slide 39: Shareholding Pre New Money (Pre Penny Warrants)
Shareholding pre new money (pre penny warrants) Shareholding Pre New Money (Pre Penny Warrants) Post Debt Equitisation Including Warrants 1 Existing shareholders 4,9% 10,3% Convert. Bonds 5,7% 5,4% HYB 89,4% 84,4% Total 100% 100%
Slide 40: Company Proposal: New Money
Company Proposal: New Money Summary of Main Economic Terms $75m Rights Issue with Warrants (ABSA) limited to Existing Shareholders Issuing New Shares at $2 coupled with Warrants 2 at $5 / 5 year maturity 1 Warrant for 1 New Share (= 5.85% capital) Open to all existing shareholders (before equitizati
Slide 41: Shareholding Post New Money
Shareholding post new money Shareholding Post New Money Post Debt Equitisation Including Warrants 1 Including Warrants 2 Existing shareholders 10,4% 14,3% 19,4% of which from new money 6,5% 6,2% 11,7% of which from existing shares 3,9% 8,1% 7,6% Convert. Bonds 5,3% 5,1% 4,8% HYB 84,3% 80,6% 75,8% To
Slide 42: Areas to Be Addressed: Headline Terms
Areas to Be Addressed Headline Terms Borrower CGG Holdings Inc. (US) Form Bond format NY Law Guarantors Adjusted guarantee package compared to existing package, reflecting release of following guarantors1: CGG Marine BV, CGG MRN, CGG Holding UK I, CGG Holding UK II, Sercel Inc, Sercel GRC Pledge of
Slide 43: Areas to Be Addressed: Headline Terms
Areas to Be Addressed Headline Terms Early Prepayment Callable at par at any time during the first 6 months after Closing Date (for avoidance of doubt from end of month 3 the repayment will be inclusive of the 3% roll-over fee that will be PIKed) ; Non-call between months 7 and 36, thereafter callab
Slide 44: Areas to Be Addressed: Headline Terms
Areas to Be Addressed Headline Terms Issuer CGG SA Format: US$ documentation consistent with existing US$ HYB Amount $350 MM Ranking Adjusted guarantee package compared to existing package in favor of HYB, reflecting release of following guarantors: CGG Marine BV, CGG MRN, CGG Holding UK I, CGG Hold
Slide 45: Areas to Be Addressed: Headline Terms
Areas to Be Addressed Headline Terms Call Year 1: 120% Year 2: 120% Year 3: 112.5% From Year 4: par Covenants Incurrence based covenants only, consistent with existing US$ HYB subject to increase in baskets for operational purposes and incurrence of $200 MM additional flex for new senior secured fin
Slide 46: B – The two shareholders proposal dated May 2017
B – The two shareholders proposal dated 11 May 2017
Slide 47: Ad Hoc Shareholder Committee (AHSC) proposal May 2017
Ad Hoc Shareholder Committee (AHSC) proposal 11 May 2017 Strictly Private & Confidential
Slide 48: Main Terms Principles
Main Terms Principles Proposal of the Ad Hoc Shareholder Committee (AHSC) Due to changing transaction structures to which the AHSC (the “Ad Hoc Shareholder Committee”) has had to adapt its responses, the AHSC has focused as much on key principles as on commercial aspects of different proposals. In p
Slide 49: Main Terms Principles (cont'd)
Main Terms Principles (cont’d) Proposal of the Ad Hoc Shareholder Committee (AHSC) This proposal is prepared in an attempt to reach an agreement with the Company and is the AHSC’s best offer based on its understanding of the Company’s latest proposal. Notwithstanding the continued deterioration in t
Slide 50: Main Terms Summary
Main Terms Summary Company’s Proposal – 11th May AHSC Proposal – 11th May Existing Shareholders Existing Shareholders would receive Warrants #1: Exercise period: 5 years Exercise price: $4 per share 1.2 Warrants #1 for 1 existing share Existing Shareholders would receive Warrants #1: Exercise period
Slide 51: Main Terms Summary (cont'd)
Main Terms Summary (cont’d) Company’s Proposal – 11th May AHSC Proposal – 11th May $800m Secured Debt Borrower: CGG Holding Inc (US) Form: Bond (under NY Law) Maturity: 5-year from closing date Interest: Libor (100bps floor) + 6.5% cash + PIK (ratchet from 2.5% to 0% depending on the outstanding amo
Slide 52: Main Terms Summary (cont'd)
Main Terms Summary (cont’d) Company’s Proposal – 11th May AHSC Proposal – 11th May New Money to Existing Shareholders For Existing Shareholders $75m straight equity (at $2 per share) Backstop: available to shareholders for a specified period, failing which it will be backstopped by HYB by way of set
Slide 53: Main Terms Summary (cont'd)
Main Terms Summary (cont’d) Company’s Proposal – 11th May AHSC Proposal – 11th May New Convertible Bond n/a Issuer: CGG SA Amount: $100m Security/Ranking: ranks pari passu with the new high yield bond Tenor: 7 years from date of implementation (12 months after new high yield maturity) Coupon: 2% cas
Slide 54: Main Terms Summary (cont'd)
Main Terms Summary (cont’d) Company’s Proposal – 11th May AHSC Proposal – 11th May New High Yield Bond (350m$) $350m new high yield bonds terms and conditions Issuer: CGG SA 6-year maturity post closing date Coupon: Libor + 400bps (cash) + 850bps (PIK) Adjusted guarantee package in favour of HYB ref
Slide 55: Steps of the AHSC proposal issuance
Step 1: Free Shares #1 and Warrants #1 issuance to Existing Shareholders Issuance to Existing Shareholders of: Free Shares #1 (i.e 33.2m new shares issued) Warrants #1 (i.e 33.2m new shares issued when/if exercised) Step 2: New Convertible Bonds and Warrants #2 issuance to Existing Shareholders $100
Slide 56: Shareholdings
Shareholdings Note: Pro-quota subscription of new money / rights issue unless otherwise stated Rights issue / New CB converted @$2 in the AHSC Proposal Proposal of the ad hoc Shareholder Committee Initial Equity = Equity split post penny Warrants / Free Shares #1 and #2, post new money, pre Out of T
Slide 57: ccc
ccc egg.com Passion for Geoscience
Slide 58: Transformation Plan: 2014-2016 achievements
Transformation Plan: 2014-2016 achievements 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 empl
Slide 59: Multi-Client Net Book Value 2016
Multi-Client Net Book Value 2016 About CGG: CGG ( www.cgg.com ) is a fully integrated Geoscience company providing leading geological, geophysical and reservoir capabilities to its broad base of customers primarily from the global oil and gas industry. Through its three complementary businesses of E