Sat, Nov 10, 2012 | 21:19 GMT
THQ in default on $50 million line of revolving credit with Wells Fargo
THQ has filed a late notification for Form 10-Q with the SEC, stating Wells Fargo sent notice it is in default on its $50 million line of revolving credit.
According to the filing, THQ was unable, “without unreasonable effort or expense,” to file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 with the Securities and Exchange Commission by November 8, “in connection with the Company’s Credit Agreement with Wells Fargo Capital Finance.”
Wells Fargo informed THQ that loan availability on its credit line was less than 12.5% of the “maximum revolver amount on one or more occasions as of and after” the fiscal quarter ended September 30.
THQ noted it is currently in discussions with Wells Fargo regarding the asserted defaults and believes that it will reach an agreement with the banking institution “with respect to such defaults.”
Wells Fargo has continued to fund requests from THQ since September 30, while the firms try to reach an agreement. There can be no assurance, however, an agreement will be reached.
Earlier this week, THQ reported a net loss of $21 million and the delay of titles South Park: The Stick of Truth, Company of Heroes 2, and Metro: Last Light.
Following the release of its financials, THQ’s stock dropped 46%.
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Posted in: Financials, THQ, Trade
Tags: wells fargo
22 comments
#1
Mike W
10/11/12, 9:22 pm
Damn…I hope they pull through this….
Darksiders 2 is a classic.
#2
SlayerGT
10/11/12, 9:42 pm
Stick a folk in em. They’re done. Sell the Geo Mod engine to someone with balls.
#3
Stephany Nunneley
10/11/12, 9:49 pm
@1 Banks are usually more willing to work things out with a company than an individual. It’ll get the credit line back on track through some sort of negotiation, surely.
#4
dex3108
10/11/12, 9:54 pm
Nooo i want to see Metro next year
#5
Mike W
10/11/12, 9:56 pm
@3
I sure hope so
it seems like every single company is losing money
#6
NocturnalB
11/11/12, 12:25 am
Their first mistake was going with Wells Fargo, They are the shadiest bank in the US I’ve ever dealt with.
#7
DSB
11/11/12, 1:04 am
@3 I don’t know about that, right now THQ is looking practically hopeless. The only way they can claw back is by one mother of a hail mary pass.
I’m sure even Wells Fargo won’t be willing to throw good money after bad.
Their best option right now is probably a sale.
#8
Moonwalker1982
11/11/12, 1:40 am
How did all of this start though? I mean aren’t games like Saints Row relatively successful? And what about Darksiders? What was the cause of all this?
#9
Sylrissa
11/11/12, 1:46 am
@8
I believe the Udraw had a lot to do with the start of THQ’s troubles.
#10
OlderGamer
11/11/12, 1:55 am
“What was the cause of all this?”
At the risk of being flamed, I would say Sheep that continue to buy the same mega franchises(and their DLC) year after year after year. The bigger one pub gets the smaller other pubs get.
A good read:
http://www.gamesindustry.biz/articles/2012-11-09-thq-and-activision-a-tale-of-two-publishers
#11
SlayerGT
11/11/12, 2:13 am
@10 OG there’s a thread running about new IP vs sequels..I wanted a refined sequel to RF:Guerilla. What I DIDN’T buy was a “generic” alien outbreak syfi game. Red Faction was one of my favorite games this Gen. It had plenty of potential to be greater. I ranting of course. I may be drinking at a fine establishment at the moment
#12
helios
11/11/12, 3:12 am
THQ was a goner after it revealed Homefront.
#13
The_Red
11/11/12, 6:02 am
@10
While I don’t fully agree with your main point (General public that pays for every annualized crap is indeed to blame but not for everything), that was a really good read.
Thank you for the link.
#14
OrbitMonkey
11/11/12, 9:28 am
@8, They made crap & had bad management. A perfect storm if you will.
#15
RandomTiger
11/11/12, 10:13 am
@11 Agreed on Red Faction. But perhaps at this point it might be best to break up THQ and distribute the healthy parts around the rest of the industry. My hope is that Volition with a good overall record can be sold off to someone else without being damaged in the process.
#16
Moonwalker1982
11/11/12, 10:56 am
Damn, i didn’t realize THQ released so much crap too. Yeah i remember Red Faction. Was an awesome game Guerilla was, but the sequal was a huge disappointment. I played it at a friend’s house but never bought it. I hope the developers of Saints Row and Metro will find a good home though. I’m not big on SR but they are not bad games and i am really looking forward to Metro: Last Light.
#17
AmiralPatate
11/11/12, 2:09 pm
Yet another proof THQ is doomed.
#18
someguy2
11/11/12, 2:23 pm
It really is a shame that THQ are in the situation they’re in considering how they try to have a diverse portfolio of ‘core’ titles. I think one of their main troubles is that they don’t have a cash cow like EA and Activision have. Hopefully a private-equity firm sorts their problems out.
#19
OlderGamer
11/11/12, 3:24 pm
“Thank you for the link.”
You are welcome, I find a lot of thought proving reads from that site. It is the only other game site besides VG247 I go to. The exlcusive articles are killer.
As far as my own opinion, that is ok, I tend to walk a step or two off of the beaten path.
#20
TMRNetShark
11/11/12, 5:41 pm
Doesn’t think ring similar to another industry? Umm… too big to… something…
Anyways, this is sad. THQ does make good games… but maybe the loose too much money by making games the wrong way? (Too many people working on one project)
#21
roadkill
11/11/12, 7:23 pm
#22
DSB
11/11/12, 8:34 pm
I think it’s a direct result of THQ trying to be a megapublisher instead of a specialist one.
They could definitely compete on quality with clever strategy games, storydriven shooters and innovative gameplay but in my opinion it all started to go wrong around Fuel of War.
It was clearly meant to be a Battlefield clone, and sadly the cloning just kept going.
Their more unique titles either got thrown out or morphed into a focus-group-friendly franchise opportunity. It played to their greatest weaknesses (because they can’t match EA or Activision on ad budgets) and squandered their greatest strengths, by not relying on the talent they had.
uDraw was just another case of chasing what they thought was a quick buck, but I think it should be called the Zynga rule that you call it a quick buck because it stays on the move. One day it’s there, the next day it’s not.
I think it’s sad that THQ is pretty much down the drain, I think Jason Rubin is an exceptional choice for CEO compared to who’s running the rest of the industry, but I also think it’s too little too late.