Sections

THQ “in discussions” to resolve “credit issue”

Wednesday, 14th November 2012 01:42 GMT By Brenna Hillier

THQ has filed a new financial report detailing its credit agreement with Wells Fargo, with president Jason Rubin providing a hopeful statement.

“As indicated in our quarterly report filed today, THQ is in discussions with Wells Fargo to resolve an issue with regard to our credit agreement,” Rubin said in a statement.

“We believe we will reach an agreement on this matter with Wells Fargo. The issue stems from a relatively small amount borrowed against the credit facility in mid-October 2012, which was subsequently repaid in full. THQ currently has $16.4 million outstanding on its facility, which is unchanged since we released second quarter earnings.”

THQ’s message remains largely unchanged since it first copped to defaulting on a repayment for its $50 million revolving credit with Wells Fargo; today’s release merely provides more details as to how the default occurred.

According to the new filing, THQ had borrowed $21 million towards the end of its second quarter, and when Wells Fargo looked over new details of the publisher’s accounts, it concluded the publisher was “over-advanced”. As such, it’s not that THQ missed a payment so much as its ongoing financial troubles caused Wells Fargo to re-assess the situation and crack down.

The default “repaid in full” Rubin mentioned was a $5.6 million payment THQ ponied up the day after Wells Fargo advised the publisher of the new technical default. That reduced THQ’s debt to $15.4 million, although it subsequently took another $1 million back as the companies negotiated.

THQ delayed three games in its most recent financial report, leaving it with no income expectations during the current quarter. It noted that Darksiders 2 under-performed, too, leading to bankruptcy fears, and a stock plummet. Ubisoft has expressed interest in buying up the ashes should THQ fold.

For those of a financial mind, the full SEC filing is available here.

Breaking news

6 Comments

Sign in to post a comment.

  1. Telepathic.Geometry

    I hope against hope that there is a happy ending to this for THQ. The irony being that when they made truly shite games, they were very successful, and now that they are making good quality games, they’re getting shafted. At least that’s how it appears to me…

    #1 1 year ago
  2. GrimRita

    @1 totally agree.

    Im pre purchasing my copy of CoH2 just do my part. THQ have to be one of my favourite diverse publishers. I have them(and Relic) to thank for making one of my favourite games of all time – Dawn of War.

    Never before was I so addicted to online gaming with my guild. The game was simply awesome in every aspect. Shame they fucked it up with DoW2.

    #2 1 year ago
  3. ManuOtaku

    #1 +1, I having a blast with darksiders 2, is really impressive how they did improve the game in every aspect, they show that they did nurture this game with love, care, dedication and support, and i think they do this with their most important IP´S, now i cannot wait for the South Park game, it will be so good, that iam trembling in sheer anticipation.

    #3 1 year ago
  4. DSB

    Let’s not kid ourselves that THQ didn’t do this to themselves.

    Cutting back on stuff like De Blob (and killing the studio) in favor of stuff like Homefront or Space Marine. Betting on uDraw instead of their studio talent.

    Or implementing Games for Windows Live, and effectively making themselves look like cunts on a platform that they’ve traditionally relied on.

    Poor leadership leads to poor results, and THQ simply didn’t get a lot of things right over the last five years.

    I’m on Team Rubin though. He seems like the right type to turn around a publisher who has lost its way.

    #4 1 year ago
  5. absolutezero

    Poor De Blob never found the audience it so richly deserved.

    #5 1 year ago
  6. ManuOtaku

    De blob was a great game, i did like it a lot and my kids too, but for what i understand it didnt sold that well, like most of the THQ IP´S by the way, therefore one has to wonder, what they did wrong? (poor marketing perhaps), or we are the ones that did the wrong for not getting their great titles?
    p.s when i put we is the gamers, i count myself in, although i have all their games, the good ones and the not so good.

    #6 1 year ago