Technicolor plans €638 million issue of 10% notes redeemable in stock

By Angela McDaniels

Tacoma, Wash., April 28 - Technicolor plans to issue approximately €638 million of 10% notes redeemable in shares, according to a 6-K filing with the Securities and Exchange Commission.

Interest is payable in the form of shares, and the notes will be repaid through the issuance of up to approximately 967 million new shares.

The company will issue approximately 638 million notes at a par value of €1.00, $1.30 or £0.91 to its senior creditors. The amount of each creditor's debt claims will be offset by the amount of notes received.

Technicolor said the transaction is the final stage of the group's balance sheet restructuring and will allow it to strengthen its capital structure while reducing its outstanding financial debt by 45% in accordance with its safeguard plan. The French Autorité des marches financers issued its approval on Tuesday.

The number of notes can be increased to approximately 641 million. In this case, the maximum number of shares to be issued upon repayment would be approximately 971 million.

The company's shareholders will receive warrants for up to 75 million euro-denominated notes.

According to the filing, each warrant will be exercisable for one note, and the warrants may be exercised on a pro-rata basis, i.e. 35 warrants will give the holder the right to acquire 10 notes at a price of €1.00 per note, and on an oversubscription basis.

The warrant exercise period will start on Thursday and close on May 11.

The company said the offering of the notes (through the warrants) will be open to the public in France and to institutional investors outside France and the United States.

The notes are expected to settle and begin trading on Euronext Paris on May 26.

Technicolor, formerly Thomson SA, is based in Boulogne-Billancourt, France, and provides video technologies, systems, finished products and services to the media and entertainment industry.

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