Acclaim delisted as credit facility extension ends
More setbacks for struggling publisher, but GMAC grants a stay of execution.
Publisher Acclaim has been granted additional breathing room by primary lender GMAC Commercial Finance, which has temporarily agreed not to act against the company despite the end of an extension to its credit facility.
Acclaim's credit line with GMAC should have been closed back in June, but the publisher secured an extension to the facility on the basis that it was working towards signing a deal for a $30 million replacement credit line with a new lender.
Now that extension agreement is finished (it should have closed on August 4th, but was extended further to August 20th) but Acclaim has still failed to secure a new credit facility. However, a deal on this new facility is believed to be close, with legal documentation from Acclaim and GMAC being sent to the as-yet unnamed lender in order to complete the transaction.
In the meanwhile, GMAC has said that it will not exercise any remedies against Acclaim while the new deal is in progress - having already agreed to waive the company's payment defaults on its existing credit facility earlier this year.
However, credit isn't the only problem that Acclaim faces this week. The struggling publisher has also been served with a delisting notice by the NASDAQ authorities, having been warned that this could be forthcoming last month.
The firm is in breach of the requirements for the NASDAQ Small Cap Market, with a market capitalisation lower than is needed for a listing, and has also failed to file its quarterly results form 10-Q with the Securities and Exchange Commission on time.
The company said in a statement last night that it will be filing its results with the SEC shortly, and will begin appeal proceedings against the NASDAQ delisting. It hopes to regain compliance with the market's rules "as soon as possible" following the results filing.