Atari filing addresses default of "financial covenants"

[UPDATE] SEC docs update shareholders, clarifies status of loan agreement with HSBC Bank.


Dungeons & Dragons Online
Marc Ecko's Getting Up: Contents Under Pressure

Long-struggling game publisher Atari, Inc., the US publishing arm of the once significant Lyon, France-based publisher Infogrames, alerted the Securities and Exchange Commission this week that on January 18, the publisher had been notified by HSBC Bank USA that it was "in default of certain financial covenants for the quarter ending December 31, 2005."

The statement downplayed the significance of the default, saying the balance was a "nominal amount of letters of credit that have been cash-collateralized."

Contrary to previous coverage, the company is not in default of any loan, per se, but rather failed to meet certain financial benchmarks required of the publisher by HSBC.

Atari has been a fountain of bad news over the past year--it lost CEO Jim Caparro in June, 2005, after only seven months on the job; the same month, the company announced it was putting its Humongous Entertainment game studio on the block. It later sold the studio to parent Infogrames for $10 million. And Bonnell remains the company's CEO, a position he assumed after Caparro's departure.

On a positive note, the publisher has two high-profile games due in the first half of 2006: Marc Ecko's Getting Up: Contents Under Pressure is due in February, as is the online role-playing game Dungeons & Dragons Online: Stormreach.

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