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Atari Secures DIP Financing, Engages Perella Weinberg Partners to Explore Options

February 06, 2013, 07:47 AM
Filed Under: Bankruptcy

A press release notes Atari, Inc. and its three US affiliates closed $2 million of interim debtor in possession  financing. According to Atari CEO Jim Wilson, "The interim DIP financing enables Atari to finance its near term ordinary course business while evaluating its strategic options. Our lawyers are already hard at work on completing the final DIP credit documents, which, once approved by the court, will enable Atari to access the remaining $3 million of availability under the loan."

Atari also announced that it, subject to court approval, has hired Perella Weinberg Partners to serve as investment banker to evaluate strategic options, including a sale of Atari's assets substantially as a going concern in a sale "free and clear" of existing liabilities and the complicated capital structure at its parent company in France.

Wilson further noted, "We hired Perella Weinberg Partners, which is subject to court approval, because they clearly understand and are excited about the significant opportunity associated with the iconic Atari brand and its rich library of classic arcade and more recent game franchises. The global reach and breadth of Atari have the potential for significant value creation in games, media & entertainment, technology and licensing sectors and provides a great opportunity for the Company' stakeholders."

On Jan. 21, Bloomberg reported that Atari bankruptcy protection in Manhattan with the intention of separating from the unprofitable French parent and seeking independent funding.

According to a Bloomberg report, Atari Inc., as well as affiliates Atari Interactive Inc., Humongous Inc. and California U.S. Holdings Inc., asked to be jointly administered in filings in U.S. Bankruptcy Court.

In December, Atari said it was strained for cash. The French parent, which has not posted a profit since 1999 despite asset sales and restructuring, forecast a “significant loss” in 2012-2013, and said it would weigh all means of raising cash and had been talking to potential investors, according to the report.

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