French seismic survey player CGG and Norwegian vessel owner Eidesvik have agreed to establish a new shipowning company.
This new unit will possess the five vessels currently owned by CGG and cold-stacked (Geo Coral, Geo Caribbean, Geo Celtic, CGG Alize and Oceanic Challenger), as well as the two vessels co-owned by CGG and Eidesvik (Oceanic Vega and Oceanic Sirius).
The company, jointly owned by CGG and Eidesvik in equal parts, will also hold all the outstanding debt related to those vessels and should be operational at the beginning of the second quarter of 2017.
CGG will continue to charter the Oceanic Vega and Oceanic Sirius from the new company and will charter the Geo Coral (from the second quarter 2017 onwards), Geo Caribbean and Geo Celtic vessels, as the charters of other vessels it currently operates expire. CGG will thus continue operating a five 3D vessel fleet with the same maritime and seismic operational management.
The charter rates, that have been agreed as part of this setup, combined with the recently revised charter rate of the Oceanic Champion, should enable CGG to substantially reduce charter costs. The new contractual terms have been mainly obtained through the re-profiling of the reimbursement schedule of the debt related to the vessels coupled with an extension of the vessels employment commitments.
The implementation of this new maritime setup will also result in a reduction of CGG gross debt amount by $182.5m corresponding to the principal amount of the Nordic loan at April 1st 2017.
Jean-Georges Malcor, CGG CEO, said: “After the implementation of our marine Transformation Plan, launched at the end of 2013, which led to a sharp decrease of our internal cost base, our objective was to further improve our competitiveness by renegotiating the charter costs for our operated fleet. Today’s agreement in principle with our Nordic lenders, combined with the strengthening and extension of our partnership with Eidesvik, will allow us to reach this goal by leading to a further reduction of our marine operational cost and will also allow us to reduce substantially our financial costs via the externalization of the existing Nordic loan.”