Funcom asks bondholders to defer company debts

As we’ve reported previously, Funcom’s financials aren’t in the best of shape, and as of this morning, the company is appealing to its bondholders to lend a hand in keeping the studio running.

The studio has summoned its bondholders to a meeting on October 26th in which they will vote on a proposal to reduce the conversion rate of each bond and extend the bonds’ maturity date for a year, giving Funcom more time to pay its debts. “The proposed amendments are intended to provide cash relief to Funcom N.V. in 2015 to allow for sufficient working capital,” the summons stated.

Funcom’s stocks have slid sharply in the wake of this news. You can read the relevant quote from the bondholders’ meeting summons after the break.

The bondholders’ meeting will be held on 26 October 2015 to vote for the following proposed amendments to the bond agreement as amended from time to time (as described in more detail in the attached summons letter):

(i) extension of the Maturity Date from 22 December 2015 to 15 December 2016;

(ii) adjustment of the Conversion Price from USD 0.37 per Share to USD 0.24 per Share;

(iii) introduction of a “Prepayment Option”, giving Funcom – under certain conditions – the possibility to redeem (all or a part of) the loans outstanding under the bond agreement.

As announced by Funcom N.V. on 13 May 2015 the proposed amendments are intended to provide cash relief to Funcom N.V. in 2015 to allow for sufficient working capital.

Source: Oslo Bors, NewsWeb, Reuters. Thanks, Pål.
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80 Comments on "Funcom asks bondholders to defer company debts"

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jencendiary
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jencendiary

solipsis How is it Funcom’s fault that you can’t read the region-specific labels? You don’t need Steam to use TSW, you know.

tobascodagama
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tobascodagama

playerxx If it were totally unprecented, Funcom probably wouldn’t be trying it.

As it stands, they’ve already convinced one of their other creditors to accept a similar arrangement. And there’s a good, rational argument for bondholders to do agree to the arrangement, if they believe Funcom’s financial analysts. Bondholders won’t be able to collect the full value of their bond if Funcom declares bankruptcy in two months, but they might be able to collect the full value if they wait another year.

Elvenmonk
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Elvenmonk

Wratts BrotherMaynard
The company I work for has been bought out several times last year alone. It doesn’t take 2 months for investors to investigate unless your business is just that bad.
Same with the company my friend works for, but change the year to 2013. He works for a game studio and they were bought out 5 times that year alone. It was kind of insane.

playerxx
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playerxx

Did this ever work? Company asks bondholders to defer company debts?

Koshelkin
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Koshelkin

kunda311 Koshelkin Severik The point was I wasn’t sure if you are refering to AoC as well. Besides that it seems we don’t have the same opinion I concur.

mysecretid
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mysecretid

Come on, Funcom, let’s get past this! Don’t let The Filth win!

kunda311
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kunda311

Koshelkin Severik How about you take it as opinion/personal preference? That occur to you yet?

I concur wholeheartedly – Funcom’s games are pretty rich in lore and world-building but rather lame when it comes to exciting action.

kunda311
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kunda311

ihatevnecks Spacecraft Yup… this statement didn’t pass the b.s. smell test.

TheChiefTurtle
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TheChiefTurtle

best of luck to Funcom !!

solipsis
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solipsis

These arrogant morons dig their own graves.
I’m from Asia. I bought a TSW key from Amazon a long time ago. While TSW servers itself is not region locked buying anything related to it on Steam is. Fucking idiots. DIE DIE DIE!