|Atari U.S. files for Ch. 11 to separate from parent||| Print ||
|Written by By Associated Press|
|Monday, 21 January 2013 12:03|
NEW YORK (AP) — Video game maker Atari's U.S. operations have filed for Chapter 11 bankruptcy protection in an effort to separate from their French parent company.
In a statement, Atari says the move is necessary to secure investments it needs to grow in mobile and digital gaming.
Atari's U.S. operations have shifted to focus on digital games and licensing, including developing mobile games, and have become a growth engine for its owner. France's Infogrames Entertainment first took a stake in Atari in 2000. It acquired the remaining stake in 2008 and changed its name to Atari S.A.
But the U.S. operations have been better performing than the rest of the company. In fiscal 2012 digital and licensing revenue both grew significantly and contributed 70 percent of revenue, while sales in bricks-and-mortar stores declined.
In December, Atari S.A. said a credit agreement it entered into with investor BlueBay would lapse at the end of the year and the company was seeking other ways to raise capital. It added that it expects to report a "significant loss" for fiscal 2012.
Atari, which turned 40 last year, was a videogame pioneer with games like "Pong" and "Centipede," but has changed owners several times amid financial problems. In its filing with the U.S. Bankruptcy Court in the Southern District of New York, Atari said it had $1 million to $10 million in assets and $10 million to $50 million in debt. It is seeking approval for $5.25 million in debtor-in-possession financing from private investment firm Tenor Capital Management.
Atari said it expects to sell its assets or confirm a restructuring plan within the next three to six months.
Copyright 2013 The Associated Press.