THQ in talks with a potential financial sponsor but threat of liquidation remains

THQ, the embattled up for sale publisher of Saints Row and Darksiders, has entered into a forbearance agreement with Wells Fargo Capital Finance to protect itself from defaulting on its credit facility.

Under the terms of the agreement Wells Fargo will not exercise its right against the publisher on its $50 million credit facility and will make additional loans to it.

The deal lasts until 15th January 2013.

In other positive news, THQ has entered into exclusive negotiations with a “financial sponsor” regarding financial alternatives. Has it found its white knight? “There can be no assurance these negotiations will result in a transaction,” THQ warned.

“We are pleased to have reached an agreement with Wells Fargo,” THQ boss Brian Farrell said. “This agreement enables us to continue focusing on bringing our games in development to market.

“Meanwhile, we are evaluating financial alternatives that will transition the company into its next phase.”

Buried at the bottom of THQ's note to press was the revelation that chief financial officer Paul Pucino had quit the California company.

Will the agreement with Wells Fargo and talks with a potential buyer be enough to save the company? Wedbush Morgan analyst Michael Pachter remains unconvinced. “Liquidity is a major concern after the most recent round of game delays,” he said.

The game delays he spoke of are for Company of Heroes, Metro: Last Light and South Park: The Stick of Truth, titles that were pushed back recently to various vague launch windows in 2013.

THQ has suffered a terrible 12 months that's seen a raft of game cancellations (Devil's Third, Insane, Warhammer 40k MMO) and high-profile exits (Danny Bilson).

While Saints Row 3 is believed to have performed well, recent release Darksiders 2 did not meet expectations.