THQ’s executive vice president and chief financial officer Paul Pucino has resigned from his post at the company, as its entered into a forbearance agreement with finance company Wells Fargo Capital Finance, extending the amount of time the publisher has to pay back its debts until January 15, 2013.
The forbearance agreement prevents legal action from being taken against the company for failing to meet its credit deadlines. Wells Fargo has also “agreed to make additional loans to the company” throughout the period of the agreement.
THQ, earlier this month, confirmed that it had $16.4 million “outstanding on its facility”.
A potential buyout may still be on the cards, however. Last night, CEO Brian Farrell confirmed that the firm is “evaluating financial alternatives that will transition the company into its next phase.”
THQ also revealed that it had “entered into exclusive negotiations with a financial sponsor regarding financing alternatives which may result in, among other things, significant and material dilution to shareholders.”
Wedbush Morgan Securities analyst Michael Pachter believes the company can’t continue on its current course as its burning through “$15 million per month ($10 million for R&D and $5 million for other expenses), revenue generation is essential to keep THQ operating, and we question the duration of the company’s viability as a public entity,” he said.
“We think that the company’s line of credit will terminate early next year, as we think it is unlikely to satisfy its forbearance conditions.”
Pachter added:
THQ’s situation continues to deteriorate dramatically, and it has been in turnaround mode for the last five years. The recent game delays, hiring of a financial advisor, financial sponsor negotiations, and refusal to take questions after reporting Q2:13 results increase our scepticism that a turnaround plan can be
executed before the company runs out of cash.We do not believe THQ is investable for most institutions.
I hate to see this happen to THQ. I really enjoyed the Darksiders games and the all but dead Red Faction series. Volition,one of THQs successful deves,is in my home town and I really dont want to see those people or any lose their jobs.
this is what happens when your games suck.
poor THQ, just cant get a break!
was really hoping the extra staff they have hired would pull them out of the hole but its not looking good.
sad, im starting to wonder if metro last light, south park, and all their other IPs will actually ever release!
come next year they will be looking for a buyer, and to be honest i cant see anyone ponying up for them.
sigh.
just goes to show theres no justice in this industry!
and consumers could not tell a good game if their lives depended on it!
companies turn out the same shit year after year and make millions!
than in comes THQ and tries to do something different, actually gives a shit about the industry, and this is how their thanked.
sigh.