Wed, Nov 21, 2012 | 04:33 GMT
THQ delays credit crunch, farewells CFO, and courts “financial sponsor”
THQ has negotiated a solution to its difficulties with creditor Wells Fargo, has entered into a mysterious financial negotiation, and dumped its chief financial officer.
The publisher and Wells Fargo have entered into a forbearance agreement, meaning the latter company has agree not to exercise its rights with respect to THQ’s technical default on a $50 million credit line.
The forbearance agreement is currently expected to end on January 15, 2013, and Wells Fargo will make additional loans to THQ during this period.
Thanks to the delay of several games, THQ still doesn’t have a revenue source lined up for before the forbearance period ends, but announced that has also “entered into exclusive negotiations with a financial sponsor regarding financing alternatives”.
Notably, this agreement may bring about “significant and material dilution to shareholders”. THQ cannot reveal who and what is involved until negotiations are complete, and cautioned that a transaction is not guaranteed at this time. It seems worth mentioning that THQ is not above selling on its licensed properties, having handed over UFC to EA, and also that Ubisoft has made noises about acquiring THQ’s IP; an acquisition is not entirely impossible, either.
To cap the hat trick, THQ also announced the resignation of Paul Pucino, executive vice president and chief financial officer. Pucino has been with the company since 2009. A replacement has not been named, although THQ has retained FTI Consulting to assist its finance and accounting team, and no mention was made of Pucino’s future activities.