This is one of the specific characteristics of CGG’s financial restructuring with respect to all precedents encountered in France. All CGG’s secured debt ($0.8bn) and all its Senior Notes (for almost $1.5bn) benefit from guarantees, subject to US law and guaranteed by 14 key foreign subsidiaries. These bondholders benefit from a direct right to capture the value of the assets of these subsidiaries which cover a large share of the Group’s activities. With their own sub-subsidiaries, the subsidiaries contributed to almost 65 % of the group’s consolidated EBITDA in 2016. This is why it was necessary to protect these subsidiaries from any actions by creditors by placing them under US chapter 11 protection.
The opening of legal procedures in France (Sauvegarde) and the US (chapter 11) signifies that the restructuring plan is validated by the French judge after agreement with the creditors and shareholders and by the American judge but only regarding the treatment of the holders of secured debt and Senior Notes. Since the shareholders and OCEANE holders do not fall under the jurisdiction of US law.