technicolor - 2020 Universal Registration Document

PRESENTATION OF THE GROUP OVERVIEW AND HISTORICAL BACKGROUND

Historical background 1.1.2 GRI [102-10] [102-15] [102-49]

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REFOCUSING OUR BUSINESSES & STRATEGIC ACQUISITIONS

a reserved capital increase of the Company, for a total amount of • €330 million, at a subscription price of €3.58 per share, reserved for the Term Loan B and RCF lenders and which was fully subscribed by way of set-off against their claims at par under the existing credit facilities; free warrants granted to New Money lenders (the “New Money • Warrants”), exercisable during 3 months, with an exercise price of €0.01 with a strike price equal to the nominal value of the shares and representing 7.5% of the share capital of the Company (after the capital increases and exercise of New Money Warrants exercise, but before dilution from the shareholders’ free warrants); shareholders’ free warrants, allocated to all shareholders providing • proof of a book entry of their shares on the date retained for the detachment of the shareholders’ preferential subscription rights under the right issue (the “Shareholders Warrants“), with a 4-year term, at the same price as the reserved capital increase (€3.58 per share) and representing 5% of the share capital of the Group after all capital issuances. Each existing share was granted 1 free warrant, and 5 free warrants will give the right to subscribe to 4 new shares. FINANCING The Group’s debt consists primarily of the New Money debt and the New Reinstated term loans (the “Reinstated Term Loans”) that resulted from the Group’s financial restructuring in 2020 (see note 1.1 for further details). The New Money debt consists of term loans issued by Technicolor USA Inc. in U.S. dollars and New York law based notes issued by Tech 6 in euros. The New Money debt has a maturity of June 30, 2024. The Reinstated Term Loans, issued by Technicolor SA in U.S. dollars and euros, consist of the remaining term loan and revolving credit facility debt following their partial conversion to equity; the terms of these new loans were modified, in particular with regard to their maturity (December 31, 2024), the interest rates and the restrictions which were aligned to those of the New Money debt. The New Money debt and the Reinstated Term Loans have both a cash and PIK (Payment In Kind) interest component. The PIK interest is capitalized (every 6 months for the debt issued by Technicolor USA Inc. and every 12 months for the remaining debt) and repaid on final maturity. For more information about the refinancing and the Group’s debt covenants, please refer to Chapter 2.3: “Liquidity and Capital Resources” and to Chapter 6: “Financial Statements”, section 6.2, note 1.1 “Main events of the year” to the consolidated financial statements and note 8 “Financial assets, financing liabilities & derivative financial instruments”.

In the second half of 2015 Technicolor completed two acquisitions: Cisco Connected Devices, the Customer Premise Equipment business of Cisco, was integrated into Technicolor’s Connected Home Division and Technicolor’s Production Services Division acquired London-based The Mill. In addition, the Group also won additional large studio customers (Fox and Lionsgate) in DVD Services and acquired the North American assets of Cinram to onboard these customers immediately. In 2018, Technicolor announced an outsourcing agreement from Sony DADC to Technicolor in North America and Australia that started the second quarter of 2018, and Connected Home launched a three-year transformation targeting market share gains while improving profitability in order to absorb potential new headwinds in the market. In the first quarter of 2019, Technicolor announced it had received a binding offer and entered into exclusive negotiations with InterDigital for the sale of its R&I activity; the deal was closed on May 31, 2019. InterDigital had acquired Technicolor’s Patent Licensing business in 2018. FINANCIAL RESTRUCTURING PLAN From June to September 2020, the Group successfully accomplished the required steps to implement the announced financial restructuring plan: June 22: opening in France of a procédure de sauvegarde financière • accélérée , a form of pre-negotiated safeguard procedure with financial creditors; July 5: approval of the draft safeguard plan by the creditor’s • committee; July 20: approval of the financial restructuring plan by a large majority • of shareholders; July 28: approval of the Financial Safeguard Plan by the Commercial • Court. As a consequence, the Group prepared the partial debt equitization (up to €660 million) which, as announced, included: a rights issue of the Company, with shareholders’ preferential • subscription rights, for a total amount of €330 million, at a subscription price of €2.98 per share, fully backstopped by the Term Loan B and RCF lenders by way of set-off of their claims at par under the existing credit facilities; Bpifrance Participations subscribed to the rights issue in cash pro rata its shareholding (c. 7.56%) on a non-reductible basis ( souscription à titre irréductible ) for an aggregate amount of circa €25 million; cash proceeds of the rights issue were used in full to repay the Term Loan B and RCF lenders, at par value;

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TECHNICOLOR UNIVERSAL REGISTRATION DOCUMENT 2020