Giz seeks administration order
Layoffs, bridge loans... Yikes.
Embattled handheld console manufacturer Gizmondo Europe has filed an application to go into administration with the UK High Court, with the firm seeking protection from its creditors while it restructures the business.
The company will go before the High Court to have its application heard on January 31st, and in the interim, is granted automatic protection from any enforcement actions by its creditors.
According to parent company Tiger Telematics, which informed the Securities and Exchange Commission of the administration application, the company has laid off staff totalling 50 per cent of its payroll as the first step in its plans to reduce operating expenses.
A $5 million "bridge loan" has also been granted to the company to help to restructure its debts - which include a $21 million debt owed to two of the firm's shareholders, which is due to be paid back at the end of March if at least $75 million of new funding is not secured by then.
Tiger Telematics' statement claims that the operations of the parent company and of Gizmondo USA are unaffected by the administration filing of Gizmondo Europe, but does reveal that the company's Swedish subsidiary and Gizmondo Studios are both likely to file for administrative protection in the coming days.