Technicolor has unveiled a new strategic plan that aims to see the company strengthen its capital structure and strategic flexibility between 2020 and 2022.
The new strategic plan, announced by the company late last week, follows a comprehensive review of the business by Technicolor’s senior executives.
It follows the decision by rating agency Moody’s to downgrade Technicolor’s financial rating from a negative outlook B2 to a negative outlook B3 in October.
This followed the announcement of the bankruptcy of rival content services company Deluxe Entertainment Services Group.
Technicolor described three main transactions that will aim to strengthen the company’s finances. These are:
- A capital increase with maintenance of shareholders’ preferential subscription rights for a total gross amount of c. 300 million euros, issue premium included
- Extension of credit lines from 2021, expiry date, to 2023, subject to the successful completion of a capital increase
- Short-term facility of $ 110 million to provide additional liquidity margin
The plan’s goal is to create a “healthy and sustainable future” for the company in the face of Deluxe’s bankruptcy filing last year. This will allow it to “better serve its customers, take advantage of market opportunities, generate profitable growth and create shareholder value,” Technicolor said.
The new strategy will be overseen by Technicolor CEO Richard Moat, who joined the company in November. Former Eir boss Moat replaced Frédéric Rose, who left the company he had led for a decade after reaching a mutual agreement with the board of directors.
In the review, Technicolor said it “will strive to streamline all operations” with a number of key areas identified in the company’s portfolio.
Technicolor said in a statement, “A number of these initiatives are already underway and the strategic plan will benefit all of our stakeholders: shareholders, employees, customers, suppliers and lenders.
“Concrete initiatives and priorities for each of Technicolor’s divisions have been identified. In production services, Technicolor is well positioned to take advantage of the flourishing growth of streaming platforms and unprecedented demand for original content and is well positioned to capture disproportionate market share in film and episodes, advertising and animation.
“DVD Services has already begun to create a more resilient business model through its continued efforts to optimize costs and renew key customer contracts under volume-based pricing systems. Finally, in the Connected Home, Technicolor will focus on broadband gateway activities, which are experiencing an improved business environment.