Technicolor's Shareholders Approve Proposed Capital Boost From Vector Capital

6/21/2012 2:00 AM ET

French color film process company Technicolor SA's (TCLRY.PK,THNRF.PK) majority shareholders on Wednesday approved capital injection of between 167 million euros and 191 million euros from U.S.- based private equity firm Vector Capital Corp. Following the transaction, to be taken place in two steps, Vector will hold up to 29.94 percent of Technicolor's share capital.

At the General Shareholders' Meeting, Technicolor also unanimously appointed Remy Sautter as Chairman of the Board, succeeding Denis Ranque, whose mandate has come to an end. The company also announced the new composition of its Board, which consists of nine members including Vector's two representatives.

In the transaction with Vector Capital, Technicolor, in a reserved capital increase, will issue 47.47 million shares through a reserved capital increase to Petalite Investments S.à r.l., an investment vehicle controlled by Vector, at a price of 2 euros per share.

Further, in a rights issue, Technicolor will issue 61.64 million shares in a capital increase with preferential subscription rights at a price of 1.56 euros per share. Vector has irrevocably committed to subscribe up to 75 percent of the amount of the Rights Issue to ensure its success.

With this approval, Vector Capital beat J.P. Morgan Chase (JPM) for the minority stake in the troubled technology and media-services company. Vector's initial offer on May 25 had been amended on June 13.

Technicolor said these capital increases will allow it to strengthen its balance sheet and enhance its capabilities to implement its "Amplify 2015" strategic roadmap.

As a result of the resolutions approved by the General Meeting, Vector's two representatives, its Founder and Managing Partner Alexander Slusky and Partner David Fishman, will join Technicolor's Board immediately upon completion of the reserved capital increase.

In France, Technicolor shares closed Wednesday's trading at 2.18 euros, up 0.10 euros or 4.81 percent.

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by RTT Staff Writer

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