THQ are quite literally hanging by a thread off a financial cliff currently, the recently heavily publicised news that the company is running out of money faster than they can spend it on overly ambitious titles, was made even worse today by the announcement that their Chief Financial Officer, Paul Pucino, has resigned with immediate effect.
In an attempt to direct the spotlight away from Pucino’sÂ departure, THQ stated they have takenÂ some serious steps forward in the hope that they can climb out of the dire situation the publisher currently find themselves in. Firstly, the company has reached an agreement with Wells Fargo Capital Finance to remove the threat of the firm “exercising its rights and remedies against THQ and its subsidiaries with respect to previous events of default under its credit facility.” The forbearance period extends to January 15, 2013, during which time Wells Fargo has also agreed to make additional loans to THQ.
“We are pleased to have reached an agreement with Wells Fargo,” CEO Brian Farrell said. “This agreement enables us to continue focusing on bringing our games in development to market. Meanwhile, we are evaluating financial alternatives that will transition the company into its next phase.”
Secondly, THQ has entered into “exclusive negotiations with a financial sponsor regarding financing alternatives which may result in, among other things, significant and material dilution to shareholders.” Naturally, THQ did not reveal who this financial sponsor was, or the size of the deal for that matter. Details are likely toÂ emergeÂ should terms be agreed, but THQ made no promises that negotiations will automatically result in a transaction.
With all the negative connotations surrounding the publisher at present, it was only a matter of time before the company’s financial woes took it’s first casualty – that being the man who was serving as Executive Vice President and Chief Financial Officer, Paul Pucino. No replacement for the CFO role has been named as THQ are “evaluating its alternatives” for the position, and in the meantime, THQ is retaining FTI Consulting to assist its finance and accounting team.
A passing statement from Farrell reflected on Paul’s time with THQ, â€œWe would like to thank Paul for his significant contributions over the past four years and wish him well in his future endeavorsâ€.