- The new facility replaces Embracer’s current SEK 4.8 billion (approximately EUR 420 million) revolving credit facility
- In June the company sold off Gearbox Entertainment, raising $460 million in order to make its outstanding loan commitments
It’s good news for Embracer as the company has successfully arranged a sizey €600 million rolling credit limit aimed to keep the wolf from its studio’s doors for at least another two years.
At the end of June the company handed over $300 million to service its $1.5 billion debt in order to keep the wheels turning, an amount it obtained through the sale of Borderlands developer Gearbox Entertainment to Take-Two in a deal said to be worth $460 million.
The latest credit agreement at least means that Embracer won’t be saying goodbye to any further valuable assets in order to stay in business. Instead the company can rest (and spend) easy for the next two years, with a further year of credit available via an option to extend.
The new facility replaces Embracer’s current SEK 4.8 billion (approximately EUR 420 million) revolving credit facility, which was set to mature (i.e. end) in May 2025 – a looming deadline which prompted the recent Gearbox sale.
Every cloud…
The company – via an official release – notes that their new, even larger credit facility has improved terms, including a lower margin for utilized debt, lowering their interest expenses.
“This step is part of our transition to becoming a leaner and more focused company.”
Lars Wingefors
“Thanks to the significant measures taken throughout the current calendar year, we have strengthened our financial structure and responsibly reduced our financial leverage,” said Lars Wingefors, co-founder, CEO and single largest shareholder of Embracer.
“This step is part of our transition to becoming a leaner and more focused company.”
Given the size of the sum and Embracer’s position it’s no surprise that no single financial institution is going alone on the deal. In all, a total of seven banks across Europe and North America have participated in the arrangment with SEB as coordinator backed up by BNP Paribas, Citibank N.A., London Branch, DNB Bank ASA, Sweden Branch, J.P. Morgan SE, Nordea Bank Abp, filial i Sverige and Swedbank AB (publ).
As to what Embracer – still in the midst of cost-cutting upheaval as an antidote to its prior policy of vigorous M&A growth – will do with the latest injection of time and money remains to be seen.
