Technicolor has filed for Chapter 15 in a US bankruptcy court, citing significant business challenges due to the Covid-19 pandemic as well as an ongoing decline in its DVD business.
A Chapter 15 filing allows a company to protect its US assets while reorganising in its home country. Technicolor filed its papers in the US bankruptcy court in the Southern District of Texas.
“Compounding matters, the Covid-19 pandemic has caused theatrical releases to be put on hold and production timelines to be pushed back, significantly depressing Technicolor’s revenue from production services,” the company said in its filing.
Meanwhile, Technicolor released a statement in Paris announcing it had reached an agreement in principle with its lenders to provide €420 million in new financing. “This Agreement in Principle provides a framework for long-term sustainability for the company’s businesses, employees, customers and suppliers, and offers its current shareholders an opportunity to participate in the company’s recovery,” said the statement.
Last week Technicolor suspended trading in its shares on the Paris stock exchange as it looked to reach an agreement with its lenders.
In a statement sent to TVBEurope, Technicolor reiterated that Chapter 15 is not bankruptcy but a proceeding that accompanies the SFA process for companies that have assets in the United States. The company has entered into an SFA in France in order to be able to implement its new financing structure with only two-thirds of the majority of their lenders, rather than the 100 per cent required under the the original financing papers.
“Our new financial framework, and the approval processes necessary to implement it, will not affect our operations. Delivering superior service and innovative solutions to our clients is our priority – as is maintaining the strong relationships we have with them,” said the statement.