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Infogrames Shares Drop As Debt Problem Re-Emerges

Following yesterday's disappointing results from struggling U.S. publisher Atari, parent French-h...
Following yesterday's disappointing results from struggling U.S. publisher Atari, parent French-headquartered firm Infogrames has announced its own results of 170.8 million euros ($205.2 million) in revenue for the third quarter of the current fiscal year, compared with 215.7 million euros ($259.0 million) the same period a year ago. The Atari part of the business was particularly badly affected by the quarter. Third-quarter sales by the company's U.S. subsidiaries (Atari Inc and Atari Interactive) totaled 75.6 million euros ($91.9 million), or 44 percent of consolidated revenue, down significantly. But Infogrames' European and Asian subsidiaries reported sales of 95.3 million euros ($114.4 million) for the period, up 6% from a year earlier and accounting for 55 percent of Infogrames Entertainment’s revenue. According to a Bloomberg News report, which also revealed that Infogrames has reported annual losses since 1999, the company's mounting debt problems are causing the firm to move swiftly toward a further sale of assets, with CEO Bruno Bonnell commenting: "We're currently in negotiations with our banking partners to refinance. We've decided to put in place an action plan which includes the sale of assets." However, the firm has already sold a number of its most prominent original IP or monetizable assets, including the Civilization franchise to Take-Two Interactive and its rights to Hasbro interactive games back to Hasbro, meaning that asset sales will be increasingly difficult. Infogrames noted in its official statement that it needs to pay 23 million euros ($27.6 million) of bank loans due between now and March 15, plus 13.4 million euros ($16.1 million) of bond debt in the short-term. As a result, Infogrames shares, traded on the French stock exchange, were down a significant 28 percent to 0.85 euros by late trading on Friday.

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