SCi to Raise £56.5 Million

SCi Entertainment plans to offer 171,605,424 new shares at £0.35 per share. 94,382,983 (55.0%) of the shares are being placed with institutional investors, including 23,471,427 shares (13.7%) each with Warner Bros. and Thorson Prime Broker. (Note that some of Warner Bros. purchase is being funded by cancelling debt owed by SCi to Warner Bros.) Existing shareholders have the right to a pro-rata purchase to prevent their stake in SCi from being diluted. The remaining 45% of the shares will be open to purchase (less any sold to existing shareholders).

After expenses related to the offering, SCi should receive around £56.5 million that will be used for working capital.

SCi Entertainment will also enter into a strategic distribution agreement with Warner Bros. Home Entertainment that will have Warner Bros. distributing SCi's titles in North America. For three years (and possibly longer) Warner Bros. will take care of sales, publicity, marketing and distribution for SCi games (although Eidos will continue to retain its own marketing team). Eidos will receive a portion of sales, and the agreement could be cancelled if SCi is sold in return for a payment of $2.5 million. Warner Bros. Will also get to appoint one of SCi's directors.