Struggling publisher THQ says it has reached a temporary agreement with lender Wells Fargo, announcing that it has entered forbearance with its creditor and will take additional loans from the bank, despite its financial defaults.
THQ also announced that it has entered into exclusive negotiations with an unnamed financial sponsor regarding previously announced "financing alternatives" the company is pursuing in the wake of poor earnings and key game delays. THQ says it's keeping the identity of its sponsor and the nature of the potential financing a secret for now, so it's unclear if the publisher's possible backer — or buyer — is a financial institution, video game publisher or another entity. THQ warns of the risk of "significant and material dilution to shareholders" should the deal go through.
"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," Brian Farrell, THQ CEO, said in a release. "Meanwhile, we are evaluating financial alternatives that will transition the company into its next phase."
THQ also announced the departure of its chief financial officer Paul Pucino today, adding that the company is "evaluating its alternatives" in replacing its outgoing CFO.
In early November, THQ announced that it had been found in technical default on its $50 million credit facility with lender Wells Fargo, adding that it was in talks with the bank to resolve its financial issues. That revelation came days after the publisher posted a $21 million loss and announced it was evaluating strategic and financing alternatives to stay afloat.