ATARI : Atari S.A. and its U.S. entities coordinate to request filings for Book 6 procedures in France and Chapter 11 protection

  ATARI : Atari S.A. and its U.S. entities coordinate to request filings for
  Book 6 procedures in France and Chapter 11 protection in the United States

  Atari S.A. and its U.S. entities coordinate to request filings for Book 6
                                  procedures
           in France and Chapter 11 protection in the United States

  

Paris, France - January 21^st, 2013. The Company has been informed by its main
shareholder and sole lender, BlueBay, that no solution has been found to  date 
for the sale of its holdings in the Company, and that it is not in a  position 
to continue to support the Company, as  the two funds invested in the  Company 
(The  BlueBay  Value   Recovery  (Master)  Fund   Limited,  and  The   BlueBay 
Multi-Strategy (Master) Fund Limited, which together hold c. 29% of the shares
and voting rights in the Company on an non-diluted basis and c. 64% on a fully
diluted basis) are in liquidation.

 

The Company  takes  note  of  the  fact  that,  since  BlueBay  announced  its 
intentions to  sell its  position in  October 2010  and to  be repaid  on  its 
outstanding credit  line, no  investor has  been willing  to replace  them  as 
reference shareholder and principal creditor,  because of the French  listing, 
limited free float, the complicated nature of the Company's capital  structure 
and the  difficult economic  and sector  operating environment.   Despite  the 
Company recording positive  current operating  income for FY11  and FY12,  and 
having reduced on  and off-balance  sheet liabilities  by approximately  € 130 
million, with  only  working capital  liabilities  and € 21  million  owed  to 
Bluebay, the Company  has been  starved for funds  and unable  to finance  its 
continued growth.

 

With the BlueBay credit  facility becoming due on  March 31^st, 2013, and  the 
strain on  cash resources  experienced by  the Group  due to  adverse  trading 
conditions and  limited development  funds, management  has resolved  that  it 
needed to file  for Chapter  11 protection  in the  United States  for the  US 
entities of the Atari group, which has  been done with immediate effect as  of 
today. Atari SA and  Atari Europe SAS have  also filed for related  procedures 
before the French courts pursuant to Book 6 of the French Commercial Code. The
Board of the Company has been  informed and unanimously supports this line  of 
action.

 

The U.S. entities expect to  effectuate, within the next  90 to 120 days,  the 
sale or restructuring, under Section 363  of the U.S. Bankruptcy Code, of  all 
or most of their assets.   The U.S. companies have  had approval to obtain  $5 
million in debtor-in-possession financing from one or more affiliates of Tenor
Capital, a firm  specializing in distressed  lending and transactions.  During 
the Chapter 11 proceedings, the companies  will conduct business as usual.  As 
part of the legal process, Mr. Robert Mattes, Group CFO, has stepped down from
his Group functions and  will remain CFO of  the U.S. entities. Mrs.  Laurence 
Betito, Financial Controller of Atari  SA, will take over  the role of CFO  of 
Atari SA.

 

Jim Wilson, CEO  of Atari explains:  "In light of  the current situation  with 
BlueBay, we have decided to take what we think is the best decision to protect
the Company  and  its  shareholders. Through  these  ongoing  procedures,  and 
especially the  auction  process in  the  US, we  will  seek to  maximize  the 
proceeds in the best interest of the Company and all of its shareholders".

 

In order to ensure equality of access  to information and prevent any risk  of 
transactions which would not respect this principle, the Company has requested
the suspension of trading of its shares and other financial instruments on the
Euronext Paris market of NYSE Euronext. The Company will notify the market  of 
the next steps relating to these procedures.

 

 

 

About Atari, SA

Atari (www.atari.com) is  a multi-platform,  global interactive  entertainment 
and licensing  company. The  original innovator  of video  gaming, founded  in 
1972, Atari  owns  and/or manages  a  portfolio of  more  than 200  games  and 
franchises, including  world  renowned  brands  like  Asteroids®,  Centipede®, 
Missile Command®,  Pong®,  Test  Drive®, Backyard  Sports®  and  RollerCoaster 
Tycoon®.  Atari  capitalizes  on  these  powerful  properties  by   delivering 
compelling games online  (i.e. browser,  Facebook® and  digital download),  on 
smartphones and tablets and other connected devices. The Company also develops
and  distributes  interactive  entertainment  for  video  game  consoles  from 
Microsoft, Nintendo  and Sony.  As a  licensor, Atari  extends its  brand  and 
franchises into other media, merchandising and publishing categories. For more
information: www.atari.com

 

Contact:

Investor relations     Media relations

Calyptus - Marie Ein   FTI - Guillaume Granier / Nicolas Jehly

Tel + 33 1 53 65 68 68 Tel : + 33 1 47 03 68 10

atari@calyptus.net     guillaume.granier@fticonsulting.com

                       nicolas.jehly@fticonsulting.com

Atari 2013 01 21

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Source: ATARI via Thomson Reuters ONE
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