Technicolor - Mapping a way through

Technicolor has negotiated a refinancing with its lenders, to be put to shareholders at an EGM on 20 July. This involves an initial injection of €420m of additional debt, in part to repay a bridge loan expiring at the end of July, to be followed by a €660m debt-to-equity swap. Shareholders will have the chance to participate in this element through a rights issue priced at €2.98. Management has outlined trading scenarios for a base case and a high case through to FY22e, both of which reflect the COVID-19 impact. We have adopted the base case guidance as our model. It has had a particularly harsh impact on the Production Services activities.