Will a Mystery Financial Sponsor Save THQ?

Identity of sponsor won’t be disclosed until deal is finalized.

THQ is in negotiations with a financial sponsor regarding “financing alternatives.” According to a statement released by the company today, the negotiations “may result in, among other things, significant and material dilution to shareholders.”

THQ hasn’t revealed exactly who the negotiations are with, noting that “the identity of the sponsor, deal size, structure and/or timing will not be disclosed until such time negotiations have concluded.” The publisher also advises that “there can be no assurance these negotiations will result in a transaction.”

Meanwhile, THQ also announced that executive vice president and chief financial officer Paul Pucino has resigned. THQ will work with FTI Consulting to “assist its finance and accounting team” in Pucino’s absence and is “evaluating its alternatives” regarding the CFO role. “We would like to thank Paul for his significant contributions over the past four years and wish him well in his future endeavors,” THQ CEO Brian Farrell commented.

THQ has also entered into a loan forbearance agreement with Wells Fargo Capital Finance regarding its credit facility. THQ notes that “the period of the forbearance currently extends to January 15, 2013, during which time Wells Fargo has agreed to make additional loans to the company subject to the terms and conditions of the forbearance agreement.”

“We are pleased to have reached an agreement with Wells Fargo. This agreement enables us to continue focusing on bringing our games in development to market,” Farrell commented. “Meanwhile, we are evaluating financial alternatives that will transition the company into its next phase.”

THQ announced in its second quarter earnings report earlier this month that it had partnered with financial advisory firm Centerview Partners “to assist the company in evaluating strategic and financing alternatives.” At the time, THQ noted it “will likely need to raise additional capital, and may need to defer and/or curtail currently planned expenditures, cancel projects currently in development, sell assets, and/or pursue additional funding or additional external sources of liquidity, which may not be available on financially attractive terms.” THQ stock fell 48% the following day.