This morning, Remedy disclosed that it is getting a €15 million convertible loan from a Tencent affiliate. The loan is subject to approval by the Remedy board during the Extraordinary General Meeting, which is slated for October 24.
The loan includes an 8% annual non-cash interest and has a fixed conversion rate of EUR 27.2 per share, a 63.86% premium over the closing price for Remedy's shares on Nasdaq Helsinki as of yesterday's closing.
The conversion part means Tencent can choose to get Remedy shares instead, up to 811K of them, which would amount to nearly 6% of total shares.
Five months ago, Tencent had already raised its stake in the Finnish game development studio to 14%; should they choose to convert the aforementioned loan, they'd go up to around 20% of the shares. Related Story Remedy Says Its Deal with Annapurna Is Unaffected by Gaming Division’s TurmoilRemedy CEO Tero Virtala explained why the company needed this loan: Part of Remedy's long-term strategy has been to strengthen our position in the value chain, to have more control over how our games are commercialized, and to grow our share of the value these games can create.
As we move towards self-publishing, this financing will support us in developing and fully realizing the potential of the games we have in development and successfully carrying out the commercial activities of our next self-published games.