Technicolor ceded most of Grass Valley
This is the first major asset sale Technicolor Group (formerly Thomson) since its financial restructuring completed in 2010. Part professional broadcast Grass Valley, which includes all the facilities for the audiovisual sector, is the subject of a transfer agreement with a U.S. investment fund, Francisco Partners. This activity is the most important of the former Grass Valley, cut into three pieces (professional broadcasting, transmission networks and head) in order to facilitate its sale. The game sold today employs 1457 people in 23 countries, of which only 200 people in France. It generates 272 million euros in turnover but a deficit of 47 million euros.
This operation removes a thorn from Technicolor. The group disposes of an activity that consumed about 50 million euros in cash per year. An economy, certainly, but not a bargain.Firstly, to pass the baby, Technicolor begin by Francisco Partners to transfer 20 million euros in cash for the operation of the business. Then, the investment fund will pay its acquisition in 2016. It issues a promissory note for 80 million euros due six years, but bearing interest at 5% per year. In other words, by 2016, Technicolor will affect only 4 million euros per year. Finally, in 2010, Technicolor will take a loss in its accounts related to the difference between the value of the sale ($ 100 million) and the value of this activity at the balance sheet. Already in 2009, Technicolor had depreciated its assets transferred 379 million euros, of which a large part due to Grass Valley.
Accordingly, this assignment s gonna in no financial position of Technicolor. Frederic Rose, Chief Executive since September 2008, had warned.It is not easy to sell assets when they lose money and the seller is pressed. The important thing is to stop the bleeding. Since early this year, the new boss has renegotiated the debt with creditors, reducing it from 2.8 billion euros to 1.4 billion, and he raised 350,000,000 euros of fresh money. Its mission today is to cut off the rotten branches. He still has to sell the two other activities of Grass Valley and the advertising company Screenvision.
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