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Atari and accounts woes hit France's Infogrames

Posted by iMark - 2006-02-13

Shares in French software firm Infogrames (IFOE.PA) plunged on Friday due to doubts over the future of its majority-owned video games maker, Atari Inc. and after a restatement of its accounts.
Europe's largest video games maker and owner of Atari said it had to restate its interim accounts after reducing the value of goodwill. It added it was in talks with its creditor banks over its debt facilities.

Companies such as Infogrames and Atari have suffered as the video games industry has moved toward next-generation consoles, and the Infogrames share price has gradually withered away to the status of a penny stock.

Infogrames shares were down 18.6 percent at 0.96 euros ($1.15) by 0905 GMT, far below peaks of around 50 euros set during the technology sector's bull-market peaks of 2000.

"One cannot exclude the risk of a capital increase that would be hugely dilutive if the bankers show a less than conciliatory attitude toward the group," said French brokerage Fideuram Wargny.


Infogrames said it had decided to reduce the value of its goodwill by 21 million euros ($25.15 million), causing it to restate its accounts for the half year to September 30.

Under the restated accounts, Infogrames's operating loss for the period was 37.7 million euros instead of a 16.7 million euro loss previously.

On Thursday, Atari said there was substantial doubt about its ability to continue operating as a viable company, and it reported an unexpected quarterly loss, causing its shares to fall more than 40 percent in after-hours trade.

Infogrames said it was talking to its banks over rescheduling or refinancing short-term loans and continuing short-term operating credit facilities and bank guarantees.

It added it was looking to sell off certain assets and had begun talks over refinancing part of its 2006-2008 bond debt maturing in March this year.

Infogrames said it had net debt of 181.8 million euros as of September 30, 2005. The company has a current stock market value of around 180 million euros, based on Friday's share price fall.

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