Thomson looks to sell Grass Valley, PRN
January 30, 2009
According to a Reuters report, technology group Thomson said Thursday it will explore with its main creditors and potential investors solutions as it warned it was likely to breach one of its debt covenants, requiring that the ratio of net debt worth at the end of December 2008 not exceed 1:1.
The group also said it would sell €1 billion worth of non-core assets, including its Grass Valley and Premier Retail Network divisions, to focus on providing services to content creators in the movie and media industries.
The group’s net debt at the end of December was reported at €2.1 billion, or a gross debt of €2.9 billion and a cash position of €0.8 billon. It also reported an 8.2 percent fall in unaudited fourth-quarter sales to €1.47 billion, at constant currencies, continuing the trend seen in the third quarter.
In light of its expectation to breach its debt covenant, the group was "reaching out to its creditors and potential equity investors to start a dialog regarding its balance sheet and address any question of a potential future breach of the net debt to net worth covenant," the statement said.
At this stage, it was not possible to predict the outcome of these talks, the statement added.
Thomson in October vowed to restructure or sell unprofitable businesses to bolster profits, generate cash and cut debt as many investors had been pressing for a simplification of its structure. At the end of last year, it completed the sale of its digital equipment product line and closed its loss-making retail telephone business in North America.