Technicolor gets needed consents to refinance, extends tender offer

By Susanna Moon

Chicago, July 10 - Technicolor said it secured consents from holders of about 54% of the aggregate principal amount of notes to refinance its outstanding senior secured debt.

The company also obtained consents for about 99% of the aggregate principal amount of participations under its credit agreement, according to a company press release.

As announced June 11, Technicolor wants to refinance participations in its credit agreement and notes issued under a note purchase agreement. As of May 31, the debt totaled €1.19 billion and had an average interest rate of 8.2%.

The company solicited consents to complete the refinancing and to make some changes to the terms of its existing debt.

The lender and noteholder consent solicitations expired at 11:59 p.m. on July 9.

The company previously said that if the proposed amendments become effective, each noteholder will receive a 1% consent fee regardless of whether they consented to the amendments.

Lenders under the credit agreement that consented to the proposed amendments by 5 p.m. ET on June 24 and are lenders when the proposed amendments become effective will receive a 1% consent fee.

Tender offer

Separately from Technicolor's consent solicitation, Tech Finance & Co. SCA is offering to acquire any and all of Technicolor's outstanding notes and outstanding participations in its credit agreement. Tech Finance is an independent, standalone special-purpose vehicle.

The tender offer has been extended until 6 p.m. ET on July 11.

As of 5 p.m. ET on June 24, investors had tendered about 61% of the aggregate principal amount of participations under the credit agreement, according to the July 10 press release.

As of 11 a.m. ET on July 9, about 99% of the aggregate principal amount of notes had been tendered under the noteholder offer to purchase.

Based on investor subscriptions received so far, the company expects to close the refinancing in the next several days, the release noted.

Noteholders who tendered prior to 5 p.m. ET on June 24 will receive 114% of par. Those who tendered after the early deadline but prior to 11:59 p.m. ET on July 9 will receive 111% of par.

The company will also pay accrued interest up to but excluding the settlement date, which is expected to be July 12 for notes tendered by the early deadline and July 15 for notes tendered after that but prior to the final deadline. The settlement date has been extended from July 11.

Lenders who submitted their participations under the credit agreement for purchase prior to June 24 will receive 100.5% of par on or about July 12, extended from July 11.

Conditions

The tender offer is conditioned on the proposed amendments becoming effective and Tech Finance receiving enough financing.

The proposed amendments are conditioned on the receipt of consents of more than two-thirds of the total participations under the credit agreement and at least 50.1% of the principal amount of outstanding notes, more than two-thirds of the total participations under the credit agreement being submitted for purchase, at least 50.1% of the notes being tendered in the tender offer and Tech Finance receiving adequate financing for the tender offer.

Tech Finance expects to fund the tender offer with $330 million of senior notes due 2020 and a €745 million senior secured term loan due 2020.

The dealer managers and solicitation agents are J.P. Morgan Securities plc, Goldman Sachs International and Morgan Stanley & Co. LLC.

Technicolor is a Paris-based provider of video technologies, systems, finished products and services to the media and entertainment industry.

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