After reporting in my previous news post about THQ and the unfortunate state of affair that they are in during these troubled times. It now looks like things have gone from bad to worse for them as they have defaulted on quite a high profile loan.
It looks like THQ have defaulted on their new credit agreement with Wells Fargo. Wells Fargo are the fourth largest multinational bank within the US and the only bank in the US to hold a AAA rating with credit rating company Standard & Poor's. Earlier in the year THQs chief financial officer Paul Pucino had announced this new credit deal stating that “This new line, along with THQ's capacity to generate strong cash flows, provide the company with substantial financial flexibility as it executes on plans for growth in the coming years”.
It looks like THQ defaulted on this new credit agreement last quarter (at the end of September) as posted in earlier news article THQ had also announced a loss of around $21 million and appointed Centreview Partners to try and find someone to purchase the troubled company.
Even with these problems Wells Fargo have continued to approve fund requests from the games publisher with THQ saying it is confident that it will reach an agreement with the bank. Sources report that if THQ remain in default it will need to pay back the whole loan including interest with an increase of 2%.