THQ Inc. (THQI:US), the money-losing video- game maker, said it’s working with Wells Fargo & Co. to resolve a technical default on its $50 million credit facility.
Wells Fargo, after reviewing THQ’s receivables and inventories, informed the maker of “Saints Row” games on Oct. 16 that it had borrowed too much under terms of the loan, the Agoura Hills, California-based company said yesterday in a regulatory filing (THQI:US).
The company repaid $5.6 million of the $21 million it had borrowed to stay in compliance, according to the filing, and three weeks later, on Nov. 7, Wells Fargo told THQ it had defaulted on the credit facility after borrowing too much on one or more occasions.
“We believe we will reach an agreement on this matter with Wells Fargo,” THQ President Jason Rubin said yesterday in an e- mailed statement.
THQ said on Nov. 6 it hired the investment bank Centerview Partners LLC to help evaluate its options after the delay of three titles put a strain on its finances. The developer missed a shift to mobile devices and away from consoles, and burned cash with uDraw, a game tablet that failed to catch on last year, losing as much as $100 million, according to Brean Murray analysts.
THQ fell 6.4 percent to $1.11 at the close in New York. The stock has retreated (THQI:US) 85 percent this year.
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