9 December 2008
Josh

Midway possibly facing bankruptcy on its $240 debt

Midway is in deep trouble as the company has now admitted that it is in danger of defaulting on $240 million dollars in debt and has hired an investment adviser Lazard Ltd. to evaluate it’s “strategic and financial alternatives.”

Financial troubles for the company have been mounting one on top of each other for months now. Majority shareholder Sumner Redstone recently sold his 87% stake in the company to a private investor named Mark Thomas for only $100,000, for which he also gained Midway’s $70 million+ in debt. Redstone’s sell-off of the stock came on the heels of a series of layoffs across all the companies studios and, more recently, a delisting warning by the New York Stock Exchange.

The Chicago Tribune reported on a Securities and Exchange Commission filing that indicated that the change in ownership now allows bondholder to request that Midway repurchase any and all bonds in full.

Midway expects all of its bondowners to request a buyout, which will cost the company $150 million that it does not have. If Midway fails to repurchase the bonds, it compounds a $90 million loan agreement with Redstone’s National Amusements company and increases total debt to $240 million.

A report in Hollywood trade paper Variety goes further in suggesting that Midway can now survive for only 50 days, unless it can come up with the $150 million figure. The report claims that the company has only $10.3 million in cash reserves and that bankruptcy is now a real possibility.

10 December 2008 12:01
The Glorious Leader

Hope they manage to turn things around soon. If not, maybe I can buy Midway on the cheap in a few months. I’m sure I could do some good things with my own game company.