JP Morgan To Increase Stake In France's Technicolor

Technicolor SA (TCH.FR), the French cinema production services provider and manufacturer of television set-top boxes, said Thursday it will launch a capital increase of up to EUR158 million which will be acquired by JPMorgan Chase.

The company said the capital increase will strengthen its balance sheet, with 80% of the net proceeds of the capital increase used to pay down debt. It will also help it implement its strategy plan which includes expanding its innovation pipeline and licensing business, developing services for digital media markets, consolidating its activities and expanding geographically.

The stake will be acquired by investment vehicle Jesper Cooperatief, jointly owned by One Equity Partners--the private investment arm of JPMorgan Chase--and JPMorgan Chase & Co. (JPM), which already holds a 1% stake in Technicolor, Technicolor said.

Following the transaction, Jesper Cooperatief will--including the 1% stake held by JPMorgan Chase & Co.--hold an interest of between 25% and 29.96% of the issued share capital of Technicolor.

On Wednesday, Technicolor asked the stock market to suspend trading of its shares after it received a proposal from an unidentified international institutional investor to take a minority stake in the company.

Also on Wednesday, French Industry Minister Eric Besson said the company's business had suffered when tariffs on TV set-top boxes were lifted in early 2012 and a contract with France Telecom SA (FTE.FR) was cancelled.

-By Nadya Masidlover, Dow Jones Newswires; [phone]; [e-mail]