Warrants entitle their holders to subscribe to new shares at a fixed price so that however much higher the price of a CGG share is compared to the strike price, the higher the profit will be if the holder decides to sell the share resulting from the exercise of the warrant.
A warrant entitles its holder to subscribe to shares but this is under no circumstances an obligation. It allows shareholders with warrants to decide during the exercise period (either 4 or 5 years in the context of CGG’s restructuring, depending on the warrant) whether they wish to exercise or not their warrants depending on the stock market performance of CGG’s share price.
Alternatively, CGG shareholders with warrants can decide to sell them, depending on stock market conditions: in the case in point, the warrant will be a listed security which can be sold at any time during the exercise period, and will have a market value based essentially on the value of the optional component (the right to subscribe in the future at a given price), with this value rising in line with the volatility of the CGG share price (this has historically been very high) and also the length of the residual strike price.
Once the exercise period has lapsed, the unexercised warrants become void.