Things don’t look to be improving for struggling publisher THQ, with more financial bad news appearing this morning.
THQ has revealed that it has defaulted on a $50 million credit facility with lender Wells Fargo, stating that "loan availability on the Credit Facility was less than 12.5 per cent of the maximum revolver amount" and that "one or more events of default have occurred under the terms of the Credit Facility, including the failure to comply with financial covenants".
Polygon has been told that “Wells Fargo continues to fund its requests while the two parties discuss the terms of their credit agreement”, which should at least preserve THQ’s short-term future.
THQ says that it remains confident that it can resolve the issue, despite it having forced the publisher into delaying the publication of its most recent quarterly report.
THQ recently admitted that it was actively searching for new financing.