CGG to Sell New Shares at 72% Discount to Fund Turnaround Planby
Oil surveyor seeks 350 million euros in sale ending Jan. 27
Total may subscribe for as much as 35 million euros of shares
CGG SA, the troubled French oilfield surveyor, said it will sell as much as 350 million euros ($379 million) of new shares at a 72 percent discount to finance its turnaround plan as a slump in crude prices curbs demand for its services from exploration companies.
“This capital increase of 350 million euros will be entirely dedicated to financing the transformation of CGG,” Chief Executive Officer Jean-Georges Malcor said Wednesday in a statement. It will allow the company to reduce its reliance on loans, according to the statement.
Each shareholder will receive one preferential subscription right for every share held as of the close on Wednesday. The price has been set at 66 euro cents apiece on the basis of 3 new shares for each held. That represents a 72 percent discount to the closing price on Monday and a 39 percent discount to the so-called theoretical ex-right price, the company said.
French state-controlled entities Bpifrance and IFP Energies Nouvelles, which own 7.04 percent and 3.58 percent of CGG, respectively, plan to use all their subscription rights, the surveyor said. French oil company Total SA may buy as much as 35 million euros of new shares should they remain unsold at the end of the subscription period on Jan. 27.