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Press releasesFebruary 13, 2020 TECHNICOLOR ANNOUNCES 2020-2022 STRATEGIC PLAN SUPPORTED BY A COMPREHENSIVE STRENGTHENING OF THE CAPITAL STRUCTURE INCLUDING A C. €300M CAPITAL INCREASE
PresentationFebruary 19, 2020 CAPITAL MARKET DAY Day
February 13, 2020 TRANSFORMING TECHNICOLOR
A reverse stock split involves replacing, by exchange, a certain number of old shares for one new share, without altering the amount of the Company's capital. In practice such an operation implies the following mechanical effects: - the number of new shares in circulation on the market is reduced proportionally to the exchange ratio (several old shares are transformed into one new share); - the par value, and as a consequence, the market price, of each new share is raised proportionally to the exchange ratio.
- The reverse stock split forms part of Technicolor’s desire to position the new shares in line with market reference.
- The exchange ratio is 1 for 27. In other words, one new share with par value of €27 will be exchanged for 27 old shares with par value of €1.00.
- This exchange ratio has been chosen for the purpose of positioning the new shares in the median of the values of the shares listed on Euronext – SBF 250 and to keep the greatest flexibility possible to price the contemplated capital increase.
- At this stage, we cannot provide you with an indicative timeline. As a result of the approval by the shareholders’ extraordinary general meeting, a notice will be published in the French official bulletin of legal notices (“BALO”) and will indicate the key dates. Following the publication of such a notice there will be a minimum period of 15 calendar days prior to the start of the period for the reverse stock split. This period will last 30 calendar days.
- With regards to the shares forming an exact multiple of the reverse stock split, shareholders do not have to complete any formalities: these shares will be automatically consolidated by their financial intermediary at the effective date of the reverse stock split. The effective date will be announced in the notice published in the BALO.
- Odd lots are shares remaining after deducting the highest multiple of exchange ratio from the number of shares held by a shareholder.
Example: a shareholder holds 70 shares. After deducting the highest multiple of 27 from the number of his/her shares (in the present case, 54 shares), 16 shares remain. These 16 shares are odd lots.
- Until the last day of the reverse split period (to be communicated following the EGM), shareholders can ensure that they have no odd lots by selling or buying shares directly on the market so that the total number of shares they hold is a multiple of the final exchange ratio.
After that date, each financial intermediary will automatically sell (on behalf of its clients) the odd lots owned by the shareholders whose holding of shares is not a multiple of the exchange ratio. Shareholders will subsequently be indemnified by their financial intermediary for the sale of those odd lots within 30 days following the end of the reverse split period.
The selling price of the odd lots will be specific to each financial intermediary. Thus, shareholders are invited to contact their financial intermediary if they require any further information.
Before the reverse stock split, a shareholder owns 58 shares. That shareholder will receive 2 new shares, leaving 4 shares that cannot be exchanged (odd lots). If this shareholder has not sold these 4 odd lots or acquired 23 additional shares (that, combined with the 4 odd lots, may be exchanged for one new share), those 4 odd lots will automatically be sold on the market by the shareholder's financial intermediary and the shareholder will receive the corresponding indemnification.
- From the last day of the reverse split period, odd lots will be automatically sold on the market by each financial intermediary, which will pass on the proceeds of the sale to the relevant shareholders within 30 days. Thus, shareholders are invited to contact their financial intermediary if they require any further information.
- Yes, the par value of each share will be increased proportionally to the exchange ratio, i.e. it will be multiplied by 27. After the reverse stock split has taken place, the par value of each new share will be €27.00 (as opposed to €1.00 for each old share).
- Yes, the number of shares making up the share capital will be reduced in proportion to the exchange ratio, i.e. it will be divided by 27. After the reverse stock split has taken place, 15,350,414 shares of €27.00 par value will be in circulation (as opposed to 414,461,178 shares of €1.00 par value before the reverse stock split).
- Yes, the market price of the shares will mechanically increase further to the reverse stock split, since the par value of each share will increase and the number of shares making up the share capital will be reduced, both in proportion to the exchange ratio.
In our case, the adjusted theoretical value of the share will be €16.79 (based on the closing price as of 29/01/2020).
- Theoretically, the reverse stock split will not affect the value of the shareholder’s portfolio. Indeed, after the operation, shareholders will have fewer shares in their portfolios, but the value of each share will have increased.
Before the reverse stock split, a shareholder owns 108 shares, trading at an indicative price of €0.62 per share.
Before reverse stock split Post reverse stock split Number of shares 108 4 Indicative share price (in euros, excluding any price movement) 0.62 16.79 Portfolio value (in euros, excluding any price movement) 66.96 66.96
The selling of the odd lots could generate costs and taxes for the shareholder. In addition, the indemnification price could evolve between the effective date of the reverse stock split and the date of disposal of the odd lots by the financial intermediary. Thus, shareholders are invited to contact their financial intermediary and their usual tax advisor if they require any further information.
- Each new share will confer one voting right. If, on the date the reverse stock split takes effect, the existing shares held by a shareholder confer double voting rights, the new shares will also confer double voting rights immediately provided they continue to be held in registered form.
- The ISIN code for the new consolidated shares will be communicated later. The ISIN code of the non-consolidated shares will remain the same until the date when they will be effectively delisted.
- At the effective date of the reverse stock split, the new consolidated shares will be admitted to trading under a new ISIN code. The effective date and the ISIN code will be communicated later.
- The record date to benefit from the reverse stock split will be on the 2nd day preceding the effective date of the reverse stock split. In other words, you must transmit a selling or a purchase order to your financial intermediary at the latest on the close of business of the 2nd day preceding the effective date of the reverse stock split. Thus, shareholders are invited to contact their financial intermediary to know the deadline applicable to them.
A timeline detailing the reverse stock split will be communicated later.
- The reverse stock split does not involve any fees for shares that form an exact multiple of the exchange ratio (1 for 27). However, shareholders are personally responsible for purchasing or selling the number of shares required to obtain a multiple of the exchange ratio. As for the management of odd lots, fees relating to buy or sell orders depend on the relationship between the shareholder and his/her financial intermediary.
- From the opening of the reverse stock split period, the shareholder will be benefit from a 30-day period to perform all the relevant trade-offs required to obtain an exact multiple of the exchange ratio on each of his/her securities accounts.
- From the effective date of the reverse stock split, the new shares will be eligible for the DSS. Concerning the old shares, they will no longer be eligible for the DSS from the effective date of suspension of the DSS. This date will be set by Euronext (approximately 1 week prior to the effective date of the reverse split).
From the suspension date of the DSS, the old shares will no longer be eligible for the DSS. Thus, they shall be the object of immediate settlement until their last listing date (i.e. the day before the effective date of the reverse stock split).
A notice will be published by Euronext at the time of the announcement of the reverse stock split and will include the suspension timeline.
Rights issue / resolutions
Technicolor proposes a c. €300m capital increase with shareholders' preferential subscription rights.
Each Technicolor share will give you the access to one preferential subscription right. A capital increase with preferential subscription rights allows the company to strengthen its equity capital and is first and foremost targeted at existing shareholders. It is the structure most commonly used by French issuers to strengthen their equity.
- Technicolor, to protect its existing shareholders, has opted for a capital increase with preferential subscription rights. The issuance of preferential subscription rights allow existing shareholders not to be diluted, if they subscribe to the capital increase.
- Preferential subscription rights are rights which are given to existing shareholders of a company enabling them to subscribe to newly issued shares ahead of anyone else. The rights can be sold on the market during a short period of time (the trading period). Shareholders will have the choice to either exercise these rights or sell them during the trading period.
- It is anticipated that the equity issuance will be launched in Q2 2020, subject to the approval from Technicolor’s shareholders and market conditions.
- Extraordinary General Meeting: March 23rd - Q1 trading update release: April 29th
- RWC Partners and Bpifrance Participations, which hold at the date of this press release respectively 10.13% and 5.27% of Technicolor’s share capital, support the new management and the 2020-2022 Strategic Plan, and have committed to subscribe to the Rights Issue for an amount pro-rata to their respective current shareholding in the company.
- Strengthen the liquidity buffer Technicolor needs to run the business at full speed and manage working capital seasonality, whilst limiting reliance on credit lines; - Capture growth investment opportunities in Production Services, optimise resource allocation among key production-incentivised or cost-advantageous geographies, and meet the stronger level of market demand in the outer years of the plan; - Fund the planned transformation projects
- Need identified is c. €300mm. The combination of the implementation of the new strategic plan and of the proposed capital structure strengthening will self-sustain Technicolor cash needs going forward.
We cannot disclose detailed terms at this stage.
Further details will be provided ahead of pricing.
A reverse split: 27 existing shares (the "Old Shares") will be exchanged into one "New Nominal Value Share".
Enter the number of old Technicolor shares held:
|You hold Technicolor shares the day before the reverse split|
You will not receive any 0 New Nominal New Nominal Value Share Value Shares
You will be compensated for 0 fractional fractionals
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