News Article

THQ Enters Forebearance Agreement With Creditors

Posted by Andy Green

Foreclosure delayed, for now

THQ has been going through some difficult times lately. The developer currently has $16.4 million outstanding on its facility and two weeks ago it defaulted on a loan worth $50 million. Things were looking bleak, but it appears the company has entered into an agreement with the finance company Wells Fargo Capital Finance that will delay what seemed an inevitable foreclosure.

This forbearance agreement prevents legal action from being taken against THQ for failing to meet its credit deadlines — something that is crucial to the company's survival. The period of the forbearance extends to January 15th 2013, and Wells Fargo has agreed to make additional loans to the company throughout the period of the agreement.

Brian Farrell, THQ’s Chairman and Chief Executive Officer, released the following statement:

We are pleased to have reached an agreement with Wells Fargo. This agreement enables us to continue focusing on bringing our games in development to market. Meanwhile, we are evaluating financial alternatives that will transition the company into its next phase.

THQ did reveal 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", so perhaps there is some hope the ailing developer can claw itself out of this hole.

Also announced was the resignation of Paul Pucino, Executive Vice President and Chief Financial Officer. No replacement was named as the company begins to evaluate its alternatives, although it was confirmed it has retained FTI Consulting to assist its finance and accounting team.

THQ has just one game on Wii U with launch title Darksiders II. The company has games lined up for other consoles, most notably Metro: Last Light and South Park: The Stick of Truth, both of which have recently been delayed.

What do you think of this news? Are you hoping Darksiders II won't be the last THQ game we see on Wii U? Let us know your thoughts in the comments below.

[via news.investors.com]

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User Comments (18)

Lan

#4

Lan said:

I used to hate THQ but they've published quite a few good games on PC. On consoles I dislike them but not on PC

SparkOfSpirit

#5

SparkOfSpirit said:

I still wish they would make a sequel to WWF No Mercy. I've been waiting for a wrestling game to come close but none have.

shingi_70

#7

shingi_70 said:

@Tsuchiya

You do realize that THQs problems come from over reaching marketing budgets and bad mangement and not development right?

Anywho expecting them to close down once the date hits and all its IP sold off to the highest bidder.

WanderingPB

#8

WanderingPB said:

Darksiders 2 on the Wii U is one of my favorite ports and i hope they will be able to make a Darksiders 3 in the future.

seronja

#10

seronja said:

i would gladly play some saint's row on the wii-u or the south park game also

McHaggis

#11

McHaggis said:

@Happy_Mask actually, it was 4A that called the Wii U's CPU horrible and slow, refusing to develop for it. THQ are just publishing the game on other platforms.

XCWarrior

#12

XCWarrior said:

THQ refuses to make another wrestling game like WWF No Mercy. Which makes no sense. So with that, I say let them burn.

diim

#14

diim said:

What I don't understand is wouldn't it make sense to port the game to as many consoles as possible considering their in all kinds of financial trouble? Instead they choose to make excuses and blame the wiiu CPU? With this much confusion within their organization, I personally think their done.

Tsuchiya

#15

Tsuchiya said:

@diim
They probably took one look at the gamepad and pretty much held their heads in their hands and given up. I really can't blame them though. Metro LL may well be their last game* and they'll want to gain some money before bowing out and releasing it on PS360 is much more sensible. I'm not a fan of Metro but it's always sad to see a developer/publisher in trouble no matter what camp you're in. I'll be getting Darksiders II for Wii U to give 'em a hand.

*I hope they survive long enough to release SR4. Now that would be awesome ;)

shingi_70

#16

shingi_70 said:

@diim

Not at all.

1. What if the ported game flops. Working on a new product would probably increase the devlopment of the port. (Its good in the long run but THq doesn't have that luxary)

2. THq is only publishing the game not developing. The dev wants to keep costs down incase thq dies. They can't start working on a expensive port if their unsure.

Edwrd

#17

Edwrd said:

"... so perhaps there is some hope the ailing developer can claw itself out of this hole ..."
Hey Andy, I think THQ is a publisher and not a developer? I think they are more like EA or Ubisoft, rather than a Retro Studios.

Company Of Heroes 2, and Metro: Last Light, both early 2013 titles look pretty interesting, both will be published by THQ but developed by Relic Entertainment and 4A Games respectively for example, hehe sorry, edged both these titles in as I quite keenly await for their release :p

Gallimastro

#18

Gallimastro said:

I'm going to miss Saints and Darksiders if they close, Saints Row especially because they don't have to take themselves seriously like GTA4 did. I understand people have preferences but it saddens me that people actually like doing things in GTA that they could easily do in the real world.

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