Atari parent Infogrames scrapes by with proceeds from bond issue

Just what is an infograme? Chaucer sometimes used the word 'grame' to describe grief or misery, a fitting description of Infogrames, the woeful parent company of Atari. Bruised and broken, but determined, the resourceful holding company has rebounded from Atari's collapse with the launch of a €150 million convertible bond issue, underwritten by chief shareholder BlueBay Asset Management.

After using roughly €40 million of the bond proceeds to repay loans from Banc of America, Infogrames is expected to be left with more than €100 million (after insurance fees) to relaunch publishing activities and sustain operating costs. And when that money runs out, Infogrames it still entitled to a €54.7 million credit line with Banc of America until Feb. 28, 2009. But this isn't simply free money; the convertible bond will further reduce the dismal value of shareholders' equity once the bonds are converted into new shares. The alternative? Carry dear Infogrames out back and put one between its eyes.