Infogrames Announces Financial Restructuring Plan

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Infogrames Entertainment, the parent company of Atari, confirmed details of its final debt restructuring plan. On September 8 (last Friday) Infogrames reached an agreement with its main creditors to work toward repaying its debt and freeing enough cash for operations. Trading of the company's shares was suspended so investors could digest the news. The plan consists of five steps:

  • Banc of America Securities Limited will increase Infogrames' loan from €20 million to €45 million and will extend the loan from March 31, 2007 to December 31, 2008. Some of this loan will be repaid early by a sale of additional stock.
  • Bondholders of outstanding bonds worth around €33.7 million agreed to change the early redemption terms and postpone the maturity of bonds that might mature earlier to February 15, 2007.
  • Later this month, holders of certain convertible bonds with a value of around €124.3 million will vote to postpone final maturity of the bonds from April 1, 2009 to April 1, 2020 and to reduce the interest rate to a negligible amount. A majority of the bondholders already support this vote. This will then be exchanged into equity.
  • The company plans to raise around €74 million of additional funds through an equity offering to existing shareholders. Current bondholders have committed to purchasing substantial portions of this offering. Those bondholders will receive warrants as an incentive and will add their own directors to company management.
This plan will go into effect, pending approval of bond- and shareholders. After the plan, shareholders who do not purchase additional shares will find their existing shareholder stakes diluted to 13% of the current stake.

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This page contains a single entry by Editor published on September 11, 2006 11:07 PM.

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