technicolor - 2018 Registration document

FINANCIAL STATEMENTS

NOTE 9 BORROWINGS & FINANCIAL INSTRUMENTS

9.2.1

ANALYSIS BY MATURITY OF FINANCIAL DEBT

2018

2017 Term Loan Debt Term Loan Debt and EIB loan

(in million euros) Within one year

3 2 3 3

2 3 2 3 2

1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years

972

More than 5 years TOTAL DEBT Of which current debt

-

1,052 1,064

983

3

2

Of which non-current debt

980

1,062

9.2.2

FINANCIAL COVENANTS AND OTHER

Under the mandatory prepayment terms of the Debt Instruments, the Group is required to apply funds towards the repayment of outstanding amounts of the loans under the Debt Instruments in certain circumstances, including the following: asset disposals: the net proceeds in respect of any disposal of any of its • assets to an unaffiliated third party will be applied, subject to a minimum threshold, to repay the outstanding amounts of the term loans unless the proceeds are reinvested in assets useful for its business within 365 days; excess cash flow: a percentage of the Company’s excess cash flow will • be applied to prepay the term loans. The applicable percentage depends on the leverage ratio of the Group, and ranges from 25% to 50%. The percentage steps down to 0% if certain levels of leverage ratio are reached. Excess cash flow is defined for purposes of the term loans prepayments, as the aggregate of net cash from operating and investing activities, subject to certain adjustments and minus the total funding costs, which comprise all voluntary or mandatory prepayments of the term loans during the year; other: net proceeds in respect of payments related to a casualty event • (giving rise to insurance reimbursements or condemnation awards) shall be applied to the repayment of the debt under the Debt Instruments, subject to certain minimum thresholds and with certain carve-outs. Technicolor can also, at its election, prepay all or part of its outstanding Term Loan Debt without penalty.

LIMITATIONS

In respect of the: term Loan Debt Agreement entered into in December 2016 as • amended in March 2017 and the RCF entered into in December 2016, • together the “Debt instruments”, the Group is required to meet financial covenants and is subject to several limitations described below. Security Package Technicolor granted security interests to secure the Debt Instruments with the pledge of the shares of the main subsidiaries of Technicolor SA and of certain intra-group loans and material cash pooling bank accounts. Early repayment and mandatory prepayments In case of default or change of control of Technicolor, creditors will have the ability to immediately demand payment of all or a portion of the outstanding amounts. The events of default apply in whole or in part to Technicolor SA. The events of defaults include among other things and subject to certain exceptions, thresholds and grace periods: failure by Technicolor SA to meet the payment dates of the Debt • Instruments or of any other financial indebtedness or to comply with material obligations related to the Debt Instruments; any auditor’s report qualification made to the Technicolor SA’s ability to • continue as a going concern or the accuracy of the information given.

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TECHNICOLOR REGISTRATION DOCUMENT 2018