Game Group Suspends Shares, Requests Administration
In a statement released yesterday, the board of directors for Game Group PLC announced that it has requested its securities be suspended from trading on the Main Market of the London Stock Exchange. The Game Group owns and operates over 1,300 GAME and Gamestation stores across Europe, selling PC and console video games.
The statement reads:
“Further to the announcements of 12 March 2012 and 14 March 2012, the board of GAME has assessed the status of the ongoing and regular discussions between GAME and its lending banks and between its lending banks and a potential third party provider of finance to the business.
The Board now considers itself to be unable to assess the business’s financial position, and is of the opinion that there is no equity value left in the Group. Therefore the Company has requested that the listing of its securities on the Main Market of London Stock Exchange plc be suspended from trading with effect from 7:30am today.
The Company will provide a further update in due course.”
The announcements being referred to were reports that The Game Group was in talks with both lenders and suppliers in order to shore up its financial position.
Game Group followed up this statement later in the day with the announcement of its intention to appoint an administrator. “…the board has concluded that its discussions with all stakeholders and other parties have not made sufficient progress in the time available to offer a realistic prospect for a solvent solution for the business.” read the statement. Appointing an administrator would allow the company to continue doing business while seeking solutions to its insolvency. “In the short term the Board’s intention is that the business will continue to trade and discussions with lenders and third parties will continue under the protection of the interim moratorium.”
One earlier sign that the company was in trouble was an announcement on February 29 in which the company stated it would not be able to fulfill any of its pre-orders for the new Electronic Arts game Mass Effect 3. Eurogamer revealed a memo showing the company could not afford to stock EA titles.