CGG Completes Rights Issue, Says Has Liquidity to Weather Crisis

Reuters

PARIS, Feb 3 (Reuters) - French seismic survey group CGG said on Wednesday it had raised 350 million euros ($387 million) in a rights issue that should help it weather a "long and profound crisis" in the oil services sector caused by the plunge in crude prices.

CGG said demand totalled 343 million euros, while the remainder of shares were taken up by a syndicate of banks guaranteeing the offer.

The rights issue will boost CGG's liquidity to $780 million which will help the company to overcome the crisis and refocus its business on less capital intensive activities, such as geology and geophysics, it said.

CGG's share price fell 8.6 percent on Wednesday as investors had doubts about results of the offer and questioned whether another rights issue might be needed.

Like peers across the oil services industry, CGG has been hit by cutbacks in the sector as major producers slash exploration in response to a slump in oil prices.

French public investment bank BPI France and IFP Energies Nouvelles hold 10.62 percent of CGG's capital as a result of the capital increase. ($1 = 0.9040 euros)

(Reporting by Maya Nikolaeva; editing by Adrian Croft)

Copyright 2016 Thomson Reuters. Click for Restrictions.

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