Embracer extends credit and loan agreements amid ongoing restructure
Company has agreed to pay $254.1 million to banks by January 2025 as it continues to decrease its debt
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Embracer Group has announced it has secured agreements that extend its credit and loan facilities into 2025.
The company's main credit facilitator has agreed to extend its current arrangement to February 2025, while its main loan provider has agreed to extend until May 2025, with a combined nominal value of SEK 1.7 billion ($166.2 million).
The amended agreements stipulate that Embracer Group will make quarterly minimum payments from Q1 FY24/25 and running up to Jaunary 2025. The total minimum prepayments will be SEK 2.6 billion ($254.1 million).
"We are pleased to further strengthen Embracer’s financial flexibility, which also demonstrates the confidence that our main banks and financial institutions have in our financial profile and strategy," CEO Lars Wingefors said in a statement.
"As part of the ongoing restructuring program, we have the ambition to reduce debt, both on a gross and net debt level. This credit and loan extension is aligned with our own agenda and puts us in a stronger position as we transition from heavy-investment mode to a highly cash-flow generative business."
Embracer Group has been trying to reduce its total debt following the collapse of a deal expected to be worth at least $2 billion earlier this year.
It is primarily trying to achieve this through a restructure that has resulted in mass layoffs, as well as studio closures. A total of 904 staff were laid off in the first three months alone, with more dismissed since then.
Most recently, Fishlabs cut around 50 jobs at the end of November, and Embracer-owned Plaion finally confirmed last week it has shut down TimeSplitters studio Free Radical Design.
So far, Embracer has closed three studios, including Campfire Cabal and Saints Row developer Volition Games.
Previous companies affected by layoffs include Crystal Dynamics, Gearbox Publishing, Beamdog, Digic, Zen Studios and Cryptic Studios.
There are reports that Embracer-owned 3D Realms and Slipgate have also suffered layoffs, but we are still awaiting official confirmation.
As of Embracer's most recent financial report in November, the group's net debt stands at SEK 14.6 billion ($1.4 billion) with the company planning to bring it down to SEK 8 billion ($757.1 million by March 31, 2024 – the end of its current financial year.
We spoke to interim chief strategy officer Phil Rogers following these results, who said the human cost of the restructure is "significant [but] necessary."