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THQ defaults on $50m Wells Fargo loan

THQ defaults on $50m Wells Fargo loan

Mon 12 Nov 2012 10:03am GMT / 5:03am EST / 2:03am PST
BusinessPublishing

UPDATE: Statement from president Jason Rubin

Update

THQ president Jason Rubin has released a statement clarifying the company's problems with its Wells Fargo loan.

"As indicated in our quarterly report (10-Q) filed today, THQ is in discussions with Wells Fargo to resolve an issue with regard to our credit agreement. 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."

Original story

Troubled publisher THQ has defaulted on its $50 million loan from Wells Fargo.

Revealed in SEC filings last week, the publisher has defaulted at least once during the fiscal quarter ended September 30. For that quarter, THQ revealed a loss of $21 million and confirmed the appointment of Centreview Partners to look at the possibility of a sale.

Despite the default, Wells Fargo has continued to fund requests from THQ, with the publisher saying it is confident it can reach an agreement with the bank.

If THQ remains in default it will need to pay back the entire loan with an interest rate increase of 2 per cent, according to the terms and conditions.

5 Comments

David Radd
Senior Editor

360 77 0.2
Not a good sign for the long terms health of THQ - I have a strong feeling they'll need to sell themselves very soon.

Posted:A year ago

#1

Stephan Schwabe
Multichannelmanagement

69 31 0.4
THQ has the only challanger for SC2 in the pipline and one of the best survival shooters.
Thy can do it without a bailout.

Posted:A year ago

#2

Morville O'Driscoll
Games Blogger & Journalist

1,372 1,018 0.7
They could also do it with Chapter 11, I think? Marvel successfully resuscitated themselves after the comics speculator-boom/bust of the mid-90s by filing for Chapter 11, though I don't think their debts were quite as large. :/

Edited 1 times. Last edit by Morville O'Driscoll on 12th November 2012 5:30pm

Posted:A year ago

#3

Paul Jace
Merchandiser

765 997 1.3
THQ and Sillicon Knights are both on borrowed time.

Posted:A year ago

#4

David Radd
Senior Editor

360 77 0.2
I believe what Stephan is referring to are Company of Heroes 2 and Metro: Last Light. While I'm sure they'll be good titles in their own right, I don't see them being big enough successes to pull THQ out of its current fiscal mire. What they needed was for Darksiders II to hit their optimistic estimates it didn't, and that's why THQ is looking to sell itself (or parts of itself).

Posted:A year ago

#5

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