Atari 2010 Annual Report Download - page 112

ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
112
In December 2009, Atari launched a financial transaction, which was finalized in January 2010, raising €43 million (or
€30.4 million paid in cash and €12.6 million paid up by offsetting a portion of the debt held against the Group), resulting
from the free allocation, in December 2009, of warrants (the “Warrants”) to its shareholders entitling them to subscribe, at
the option of Warrant holders, to new shares (the “New Shares”) and/or to bonds redeemable into new or existing shares
(the “ORANE bonds”), under the conditions set out in the prospectus which received the AMF visa number 09-367 on
December 10, 2009.
The subscriptions involved:
• 7,610,895 New Shares (ISIN FR0010478248) of the Company, representing approximately 64% of the issue,
and
• 156,428 ORANE bonds (ISIN FR0010833053), representing approximately 36% of the issue, with 125,964 (by
offsetting a portion of debt held against the Group for approximately €12.6 million) and 26,672 ORANE bonds
(representing a cash amount of approximately €2,6 million) subscribed respectively by The BlueBay Value
Recovery (Master) Fund Limited and The BlueBay Multi-Strategy (Master) Fund.
Further to the operation, the BlueBay funds hold approximately 19% of the capital on an outstanding basis and
approximately 64% of the capital on a fully diluted basis (after adjustments).
This operation enables Atari to increase its financial flexibility by raising €43 million dedicated to its videogame publishing
plan and strengthening shareholder equity.
1.5. The “Atari Transformation” plan and other cost-saving measures
In May 2009, the Company announced an additional restructuring plan in the first quarter of 2009-2010, in response to
the possibility of continued low demand and aimed at advancing the development of its online business. The
reorganization reduced administrative expenses and working capital needs, primarily through the sale of the Group's
entire interest in Namco Bandai Partners in Europe, significant cost-cutting measures and a more efficient organization of
Group offices worldwide.
1.6. Amendment to the credit facility agreed with Banc of America: transfer, extension of the maturity and
reduction of the credit facility
In a letter to the Company dated November 4, 2009, BlueBay undertook to have the maturity date of the Banc of America
credit facility postponed to December 31, 2010 to extend its own credit facility on the same terms and conditions as those
preliminary in effect. As per amendment 9 to the loan agreement of April 21, 2006, signed on December 2009, the
maturity date of the senior credit facility has been extended to December 31, 2010.
As part of the financial transaction initiated in December 2009, the Banc of America credit facility has been transferred to
BlueBay as of December 10, 2009.
In addition, the subscription price paid by the BlueBay Value Recovery (Master) Fund with respect to its participation in
the financial transaction (free allocation of warrants) (€12.6 million) was paid up through a set-off against a portion of the
principal amount of the debt held by The BlueBay Value Recovery (Master) Fund on the Atari Group. As per amendment
10, signed on 27 April 2010, the total amount of the credit facility to be drawn has been reduced from €61.2 million to
€49.3 million.
As of March 31, 2010, the total amount of the credit facility drawn was €5.3 million.
2. Accounting principles and methods
2.1. Accounting basis
The financial statements of Atari have been prepared in accordance with French law and regulations. The financial
statements have been prepared and are presented in accordance with the General Chart of Accounts 99-03 of April 29,
1999, as amended by the regulations of the Accounting Regulation Committee (Comité de la Réglementation
Comptable).
Going concern assumption
At March 31, 2010 shareholders' equity amounted to €47.9 million, taking into account the €22.6 million profit posted for
2009-2010. The income generated during the period, combined with the successful equity issue of January 2010 and
various measures implemented during the fiscal year, brought the Company’s net worth back to more than half of its
capital stock.