technicolor - 2020 Universal Registration Document

FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS Note 1 - General Information

General Information

NOTE 1

Technicolor is a leader in Media & Entertainment Services, developing, creating and delivering immersive augmented digital life experiences. Technicolor SA is the holding company of the Group and manages the cash of the Group’s subsidiaries. These notes are an integral part of these annual financial statements. They contain additional information relating to balance sheet and profit and loss account and give a true and fair view of the Company’s assets, financial position and results. Information which is not mandatory is disclosed only if material. Main events of the year 1.1 ACCELERATED FINANCIAL SAFEGUARD 1.1.1 AND FINANCIAL RESTRUCTURING OF THE GROUP pursuing discussions with its financial partners to obtain financing 1. in order to cover the Group’s immediate cash needs; discussions with all the financial partners on the Group’s debt 2. restructuring; analysing any solution which shall end its difficulties. 3.

On February 13, 2020, the Group announced the implementation of a 3-years Strategic Plan (2020-2022), combined by a short-term strengthening of the Group’s financial structure, which should result in a capital increase of €300 million with preferential subscription rights. This capital increase, as well as the stock consolidation (1 new share for 27 old shares) and the capital decrease not motivated by losses previously realized, were approved on March 23, 2020 by the Company’s Extraordinary General Meeting of shareholders. The stock consolidation and capital reduction were definitively completed in May 2020. In March 2020, the Group set up a bridging loan for a nominal amount of U.S.$110 million to cover its needs until the capital increase. However, since the announcement of this Strategic Plan, the Group has been impacted by the Covid-19 pandemic and containment measures put in place to prevent the spread of the virus. These effects are detailed in note 1.1.2. This underperformance also increased the Group’s short-term liquidity needs. But, in these circumstances, the possibility of launching this capital increase has itself diminished. Taking the Group’s situation into account, the Company has considered new financing solutions with its historical financial partners or new investors, in order to compensate for the aborted capital increase and repay the U.S.$110 million bridging loan maturing on July 31, 2020. After initiating contacts with potential investors, the Company considered that the appointment of conciliators would allow it (i) to facilitate, supervise and secure the continuation of its discussions, and (ii) to consider the terms of a more global restructuring of the Group’s debt. In these circumstances, on May 26, 2020, the Company informed the market of its intention to enter into discussions with its financial partners and request the agreement of the Group’s current lenders in order to consider opening a conciliation procedure, without this being a case of default under existing financing documents. These agreements were all obtained on June 1, 2020 and, by order as at June 2, 2020, the President of the Paris Commercial Court appointed SELARL FHB, represented by Maître Hélène Bourbouloux and Maître Gaël Couturier, as conciliators of the Company, to assist the Group in:

Following discussions between stakeholders in the conciliation procedure, and under the aegis of the conciliators, the Company drawn up the main terms and conditions of its financial restructuring. Nevertheless, the urgency of the situation prevented the unanimous agreement of the involved Company’s financial creditors within the time limit and made it impossible to implement the restructuring in the context of the conciliation procedure. However, the status of the discussions made it possible to consider an accelerated financial safeguard procedure, in order to reduce the Group’s debt and meet its operating needs. In these circumstances, by judgment of June 22, 2020, the Paris Commercial Court opened the accelerated financial safeguard procedure for a period of one month. Under the terms of this judgment, the Paris Commercial Court designated SELARL FHB, represented by Maître Hélène Bourbouloux and Maître Gaël Couturier as Judicial Administrators, and planed on July 21, 2020 the date of the hearing to review the draft safeguard plan. On the same day, the Company also requested and obtained the benefit of the provisions of Chapter 15 of the American Federal Bankruptcy Code, in order to recognize the effects of the accelerated financial safeguard procedure on the American territory. On the same date, the Company and some of its main creditors reached an agreement on the main terms and conditions of the Group’s financial restructuring. The draft safeguard plan (which formalizes terms and conditions of the aforementioned agreement) was approved by the Credit Institutions and Assimilated Committee on July 5, 2020. In the same time, the principle agreement was formalized between the Company and the involved creditors in the framework of legally binding agreements (lockup or restructuring support agreement) confirming the key terms and conditions of the Company financial restructuring. Under these agreements, the parties have committed to support and carry out any approach or action reasonably necessary for the execution and completion of the financial restructuring of the Company. The main restructuring operations of the safeguard plan and of the New Financing, entirely completed at the financial year end, are the following:

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