Problem US game maker Atari this week replaced its $3 million outstanding loans with funds from BlueBay Asset Management replacing those from Guggenheim Corporate Funding. BlueBay is a significant shareholder of the parent company Infogrames Entertainment.
The new credit facility drops many of the provisions and ups the cash available to $10 million, eliminates some of the prepayment fees, and extends the maturity to December 31, 2009. The new funds are expected to keep Atari afloat while its new management team prepares it for sale or for raising further debt, or both.
Last month the new Infogrames CEO Patrick Leleu slashed the board of Atari and dragged in new high powered replacements aiming to stem the fall in revenues which fell from $343 million two years ago to $206 million last year, to $122 million in its latest annual figures.
Atari added a chief restructuring officer in the form of Curtis Solsvig III who works at AlixPartners, which has been retained to assist Atari in evaluating strategic alternatives ‘ usually slang for a trade sale or asset sales.
Other appointments are top US lawyers, restructuring and strategy specialists and investment advisors, more in keeping with a group planning a series of strategic asset sales than continued running of operations long term. Atari still claims to be the third largest independent games publisher in the US and owns over 1,000 console and PC titles.