Long-expected Atari Crisis Poised to Bite
Bonnell promises mass executive departures if debt plan rejected.
The Infogrames group's long-predicted plunge into the abyss may be about to begin, with CEO Bruno Bonnell making some of the starkest comments imaginable about the future of the French publishing giant.
Following years of over-stretching and a string of financial bail-outs from the French government, Atari's position would appear to be becoming untenable as reality finally bites. The group has has postponed a shareholder vote on part of a rescue plan until January 19,, under which Infogrames would issue fresh stock to help it repay a 117 million euro ($155.2 million) debt due in July which - right now - it will be unable to meet.
Chief Executive Bruno Bonnell pledged he would resign if shareholders vote to reject the proposal. The "...president of every single company, if rejected by a majority of shareholders, must leave," he added. "But we are very far from this now. I'm not gone yet."
The firm will need to gain the support of at least 25% of its shareholders to have the new stock issued. Analysts are currently offering mixed views as to whether the firm will see success.
Bonnell stated that if shareholders greenlight the refinancing plan, repayment of "the bulk" of the firm's debt would be put off until 2009. "We feel comfortable with the new profile of debt," he said.
Under the plan, Infogrames would buy back around 60% of bonds maturing in July 2005 with cash and shares, and the remaining 40% with a newly issued 6% coupon bond slated to mature in March 15, 2008, backed by recently buoyed shares in its Atari unit.
If the firm’s convoluted rescue plans are rejected, interest from other big industry players is likely to follow.
Stay tuned for developments on this story as they break. Perhaps we'll resist mentioning DRIV3R then too...
Following years of over-stretching and a string of financial bail-outs from the French government, Atari's position would appear to be becoming untenable as reality finally bites. The group has has postponed a shareholder vote on part of a rescue plan until January 19,, under which Infogrames would issue fresh stock to help it repay a 117 million euro ($155.2 million) debt due in July which - right now - it will be unable to meet.
Chief Executive Bruno Bonnell pledged he would resign if shareholders vote to reject the proposal. The "...president of every single company, if rejected by a majority of shareholders, must leave," he added. "But we are very far from this now. I'm not gone yet."
The firm will need to gain the support of at least 25% of its shareholders to have the new stock issued. Analysts are currently offering mixed views as to whether the firm will see success.
Bonnell stated that if shareholders greenlight the refinancing plan, repayment of "the bulk" of the firm's debt would be put off until 2009. "We feel comfortable with the new profile of debt," he said.
Under the plan, Infogrames would buy back around 60% of bonds maturing in July 2005 with cash and shares, and the remaining 40% with a newly issued 6% coupon bond slated to mature in March 15, 2008, backed by recently buoyed shares in its Atari unit.
If the firm’s convoluted rescue plans are rejected, interest from other big industry players is likely to follow.
Stay tuned for developments on this story as they break. Perhaps we'll resist mentioning DRIV3R then too...
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Comments
schnide 5 Jan 2005 11:24
1/3
I really want to think this is terrible news, and that any publisher going under (except maybe EA and 3DO) is a bad thing if only for the staff, but any company that can so arrogantly use the Atari brand to sell sh*te software with no connection to it's heritage maybe just deserves it.
Presumably the Atari name could be sold on again and used for the good of humanity* once more?
*slight exaggeration
Presumably the Atari name could be sold on again and used for the good of humanity* once more?
*slight exaggeration
PresidentEvil 5 Jan 2005 12:40
2/3
schnide wrote:
I really want to think this is terrible news, and that any publisher going under (except maybe EA and 3DO)
Thanks for that inspiration. I have now formulated a rescue plan to wrest this traditional important Japanese-sounding American name from these cheese-loving communists.
My plan is to bomb Infogrames, a known supporter of global terrorism, until they go out of business. Then we will offer a Marshall-plan like plan to assist them. The plan will involve Electronic Arts, good God-fearing American megalomaniac capitalists with no interest in anything but profit, to return the Atari name to its former glory, by releasing games like Tempest 2K5, Battlezone Underground X, NASA Asteroids 2005, and Driv4r.
Following Atari's excellent lead, we will make it illegal for anyone to publish bad reviews of these games, and punish dissent with the death penalty. Or 23 day shifts working in the code mines of Redwood.
Afte this we will invade Rockstar and rename it RocstEAr, and annexe Activision - making it EActivision.
Ditto 5 Jan 2005 18:05
3/3
Remember though that Infogrames have produced some games of note (although I agree that I will always think of them as Infogrames rather than Atari). Also remember that while everyone remembers Atari as great, ithe company was very poorly managed and structured resulting in it's demise.
I would be at a loss without the original UT. I've just bought 2004, but can't play it until I've built my new computer :(.
I would be at a loss without the original UT. I've just bought 2004, but can't play it until I've built my new computer :(.