Last close As at 06/08/2026
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Research: TMT
The impact of the COVID-19 pandemic on equity markets has interfered with Technicolor’s plans to refinance the group in part through a €300m rights issue, as was announced in February 2020. Management is now seeking an alternate solution to enable it to move ahead with the strategic plan unveiled at that time. It is seeking a conciliation with its creditors to facilitate negotiations with a third-party investor and one of its existing lenders that will inject €400m into the business, to be followed by a debt to equity swap. Management has withdrawn guidance and our estimates remain under review.
Technicolor |
Change of plan |
Revised financing |
Media |
27 May 2020 |
Share price performance
Business description
Analysts
Technicolor is a research client of Edison Investment Research Limited |
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The impact of the COVID-19 pandemic on equity markets has interfered with Technicolor’s plans to refinance the group in part through a €300m rights issue, as was announced in February 2020. Management is now seeking an alternate solution to enable it to move ahead with the strategic plan unveiled at that time. It is seeking a conciliation with its creditors to facilitate negotiations with a third-party investor and one of its existing lenders that will inject €400m into the business, to be followed by a debt to equity swap. Management has withdrawn guidance and our estimates remain under review.
Year end |
Revenue (€m) |
EBITA |
PBT* |
EPS* |
DPS |
P/E |
12/17 |
4,253 |
151 |
47 |
(4.3) |
0.0 |
N/A |
12/18 |
3,988 |
98 |
7 |
(3.2) |
0.0 |
N/A |
12/19 |
3,800 |
42 |
(97) |
(6.5) |
0.0 |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
We recently reported on the Q1 figures (May update), which were in line with management expectations. Prospects across the three group businesses were varied, with some encouraging signs in the performance of Connected Home, particularly in North America. The need for additional financing is clear, with a current equity value of €58m compared to end March net debt of €1.6bn. The €400m injection referred to in the announcement will be used to pay off the €110m bridging facility (due in July 2020) and cover the liquidity required to fund working capital. To do this transaction, management requires prior agreement with the relevant majority of creditors (key creditors are Nataxis/Citibank, JP Morgan Europe, Citigroup and Wells Fargo) under the auspices of a court-appointed conciliator. The Solicitation applied for allows the arrangements to be discussed amicably and consensually and will expire at 17:00 New York time (22:00 London, 23:00 Paris) on 28 May, unless extended by Technicolor. Once the new financing is in place, management can then look to get further agreement from lenders to facilitate a debt-to-equity swap, which may significantly dilute the interests of existing equity shareholders.
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Research: Healthcare
PDL distributed its 26.7% Evofem stake to shareholders on 21 May 2020, just before the 22 May 2020 FDA approval for Evofem’s hormone-free contraceptive gel, Phexxi (the PDUFA date was 25 May). The timing of the distribution allowed investors the ability to decide whether or not to hold through the PDUFA and also provided a liquidity event to sell shares, if desired. Additionally, there will be a virtual shareholder meeting on July 16, 2020 at which shareholders will vote on the dissolution plan for the company. Ultimately, PDL believes that shareholders will receive between $3.00 and $6.00 per share once assets (including Evofem) are fully monetized.