CGG – Non-Deal Roadshow.
All,
Please refer to our unchanged analysis here.
It is no secret that the company has been planning to refinance its high-cost post-Sauvegarde capital structure and now that the company has proven its resilience, Kepler Cheuvreux have scheduled a non-deal roadshow for 5 March 21.
While there are not yet any signs that this will kickstart the refinancing process, the involvement of Kepler Cheuvreux, an EU-focused equity broker, suggests a continued interest in the company from the equity side, which could further support equity cushion and lower coupons on the debt. Call dates come due in Q1 21 and Q2 21.
A refinancing with a capital increase is possible, but perhaps not necessary, given Brent prices now comfortably exceeded the 50-60 level that makes most oil capital structures work, including CGG’s, and given the strong primary HY market environment.
We remain long the 23s and 24s with 4% of NAV.
Feel free to reach out if you would like to exchange ideas on the name.
Juliano
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