Atari 2010 Annual Report Download - page 40

ANNUAL FINANCIAL REPORT – REGISTRATION DOCUMENT
40
• Rollout as from June 2009 of an additional worldwide restructuring plan, in order to limit the impact of falling
demand from end-consumers and facilitate the Group’s transition to Online focused business.
In order to ensure that it has the requisite funds to finance its operations in 2010-2011 (and beyond) and to
strengthen its equity, the Company also:
• Launched a financial transaction, which was finalized in January 2010 and enabled to raise €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 “ORANEs”), under the conditions set out in the prospectus which
received the AMF visa number 09-367 on December 10th, 2009.
• Implemented new processes and controls to improve efficiency within the Group and improve profitability of its
operations, including strict process to review the development and the profitability of each game, review and
control of all litigations, etc.
• Strict cost control on day-to-day operations.
Based on the above-described measures and assumptions, as well as the forecast for fiscal year 2010-2011 as
approved by the Board of Directors, management believes that the Group’s financial resources – including the transfer
and extension of the Banc of America credit facility to BlueBay – will be sufficient to cover the Group’s operating
expenses and capital expenditure for the year ending March 31, 2011, assuming that the current €49 million credit facility
with BlueBay would be renewed at the end of its maturity date i.e. after December 31, 2010.
On this basis, the Group has applied the going concern principle in preparing the consolidated financial statements.
Management believes that the assumptions it has used are reasonable. However, in view of the uncertainties inherent in
negotiating credit facilities and carrying out a strategic refocusing within a difficult economic environment, actual results
may differ from management’s forecasts. Such a situation could limit the Group’s ability to finance its recurring
operations and lead to adjustments in the value of its assets and liabilities, notably goodwill and intangible assets whose
total value in the consolidated balance sheet at March 31, 2010 amounted to €24.5 million and €31.3 million respectively.
The table below shows the maturity of the debt’s principal and interest:
'& '& '& '& '& '&
$

(##  )# * )# * )# * )# * )# * # %
+ , , , , , , , , &'( )'
-# , , , &'* '+
#  , , , ') '
.#### , , , , , , , , , , , *', &'(
Risks stemming from claims against guarantees given by the Group
On December 10, 2010 a transfer agreement has been signed with the Original Lender (Banc of America), The Bluebay
Value Recovery (Master) Fund Limited and the Company. The Parties have agreed to the transfer by the original lender
to Bluebay Recovery (Master) fund Limited off all of the original lender’s commitment, rights and obligations and
guarantees under the facility agreement signed on April 21, 2006. This transfer of contract does not affect Company’s
liability in case of breach of contract; this transfer of contract leads consequently to a transfer of the same financial risk to
the benefit of the new Lender.
Risks related to potential conflicts of interest
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. As per amendment 10 to the credit facility, signed in 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.
As of March 31, 2010, BlueBay Asset Management held 19.2% of the Company’s shares and 19.1% of the voting rights,
on behalf of the BlueBay Value Recovery (Master) Fund and the BlueBay Multi-Strategy (Master) Fund Limited, both of
which it manages. BlueBay Asset Management also held 1,663,292 warrants issued in 2009 (exercisable for 1,862,887
shares), 1,327,731 ORANE bonds issued in 2009 and exchanged as part of the public exchange offer in January 2009
(exercisable for 25,173,780 shares), 342,095 ORANE bonds issued in 2009 and acquired as part of the issue of ORANE
bonds with warrants attached (ORANE-BSA) in January 2009 (exercisable for 10,019,963 shares) and 152,636 ORANEs
2010 acquired as part of the financial transaction in January 2010 (exercisable for 4,028,064 shares).