GL and Bank of America Securities.Dilution

The financial restructuring of Infogrames plan is very painful and removes nothing to uncertainties at the operational level, but shareholders have, in any event, not choice, and they are treated in a fair manner to financial investors. The report carried out by independent experts, in this case cabinet partners in Finance, the restructuring plan of the debt of the Publisher of French video games to be submitted Thursday to the vote of the shareholders Assembly General is without appeal and casts light flood on the evolution of the group in recent years. For the cabinet, the alternative is simple for shareholders and creditors of Infogrames: "See a partial or total loss of their assets or give a chance to a strategy of turning through financial investments." If Bruno Bonnell, the President of Infogrames, sees the plan as a "new opportunity" for the Publisher, associated finance the sees rather as the last chance.

The cabinet recalled that in the course of the last seven years, Infogrames has cumulative losses of EUR 564 million and spent the bulk of its resources on its debt in a context where the operation of its activity has never identified positive flow. "In the absence of reference shareholder, the company sought unsuccessfully for three years of institutional investors or providers of capital for the industrial and its assets", note experts.

This strategy has been effective since the Group reduced its debt of EUR 371,4 million between 2001 and 2006, although, as the report pointed out, it has been extremely costly to shareholders and creditors. "Infogrames continued a strategy of buying time to protect the value of its assets, which could be significantly reduced because financial incident of breach of contract clauses", note experts. Clearly, the group is committed for several years in one against the - shows infernal against bankruptcy.

Adjustment of the action steps

The direction of Infogrames therefore found at the foot of the wall before the persistence of the worsening its operational performance and yet heavy debt, despite the successive restructuring of debt. And it was choice to use conscious financiers of the operational risks inherent in society, to support it in this ultimate debt reduction plan. Even if it is accepted, shareholders will not, however, removed from case, while the report states that, to 0.15 euro the price of the shares newly issued, they are treated fairly from financial investors (Bluebay, Boussard & Gavaudan AM, GL and Bank of America Securities).

Dilution, under the proposed plan, is such that an adjustment of the action in the short term appears, so it is particularly difficult to have visibility on the industrial and commercial of the Publisher perspective. Associated finance dare however a simulation: reaching a value of EUR 450 million to horizon 2009 (double the current value), equivalent to an operating margin of 8 and a multiple of ten times the operating income upgrading the course of action clear to 0.28 euro only, taking into account the dilution! "The operation has no alternative given the seriousness and the urgency of the situation (...)." "But they (shareholders, Editor's note) must be notified, if they intend to accept, that the operation is very risky", concluded Finance Associates.