Notice by Starbreeze of presentation of final reconstruction plan

Mon, Nov 11, 2019 17:50 CET

STOCKHOLM (November 11, 2019) – A reconstruction plan and petition for composition negotiations were submitted today to the Stockholm District Court as part of the reconstruction process for Starbreeze AB (publ) and related subsidiaries. In this plan, the Administrator presents information including the proposed agreements presented to creditors of Starbreeze for the settlement of its debts.

Starbreeze has been in reconstruction since 3 December 2018. The company’s total debt amounted to SEK 395,7 million at November 6, 2019.

Aimed at reaching agreements for the settlement of the company’s debts, Starbreeze has sent proposed composition arrangements to its creditors. As proposed, the company's debts will be repaid in full to all creditors, with no reductions.

Separate proposals have been presented to Starbreeze’s largest creditors, Nordea and Smilegate, which have combined claims of SEK 320 million of the debt. The terms of the proposal to Nordea include that Starbreeze’s obligation to pay will be conditional in a particular manner and that Starbreeze will provide additional collateral. Smilegate holds a convertible bond of SEK 215 million issued by Starbreeze AB. Negotiations regarding the convertible bond are ongoing.

The majority of the creditors, whose combined claims amount to approximately SEK 75,7 million of the debt, were given a choice at the creditors’ meeting between two repayment alternatives. As a basis of decision regarding the two alternatives, the letter to creditors from Starbreeze provided an assessment of future cash flows from operations based on certain assumptions. In simplified terms, the alternatives presented are:

Repayment in full within a maximum of five years at five percent interest, but potentially earlier if certain accelerating events occur.

Repayment in full within 364 days with no interest.

Starbreeze estimates that total repayment to creditors who choose repayment within a maximum of five years, based on these accelerators, could amount to SEK 40 million in 2020, conditional upon the signing of a publishing agreement for PAYDAY 3 and PAYDAY: Crime War during the first half of 2020.

The reconstruction process has included analysis by the Administrator of matters including whether Starbreeze has performed its obligations to pay. The review, which covers the period of six months prior and up to the date of reconstruction, showed no irregularities but suggests various potential improvements. The review also led to efforts during the reconstruction period to improve certain internal functions.

An external accounting firm has also valued the company’s assets. These assets (mainly the IP rights to PAYDAY) were valued at SEK 1,600 million. The corresponding assets were recognized on the consolidated balance sheet in the amount of SEK 341 million as of 30 September 2019

The Administrator has today submitted to the District Court an application for a creditors’ meeting during composition negotiations. The District Court will hand down its decision on the negotiations and the date of the creditors’ meeting soon.

The complete reconstruction plan for all companies is available on the company’s website: https://www.starbreeze.com/investors/reconstruction/

For more information, please contact:

Maeva Sponbergs, EVP Communication

Tel: +46(0)8-209 208, email: ir@starbreeze.com

This information is information that Starbreeze AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 17:50 CET on November 11, 2019.

About Starbreeze

Starbreeze is an independent developer, creator, publisher and distributor of PC and console targeting the global market, with studios in Stockholm, Barcelona and Paris. Housing the smash hit IP PAYDAY, Starbreeze develops games based on proprietary and third-party rights, both in-house and in partnership with external game developers. Starbreeze shares are listed on Nasdaq Stockholm under the tickers STAR A and STAR B with the ISIN-codes SE0007158928 (A share) and SE0005992831 (B share). Starbreeze including certain subsidiaries is, since December 3 2018, in reconstruction. For more information, please visit starbreeze.com