Zattikka faces administration as it buckles under loan payment

Zattikka faces administration as it buckles under loan payment
Craig Chapple

By Craig Chapple

July 23rd 2013 at 2:23PM

London firm has until August 2nd to pay Hattrick £275,000

Online games firm Zattikka could go into administration next month as it struggles to make a loan payment of £275,000.

The company revealed on July 9th that it was due to pay the interest, but it has still failed to make the payment.

Zattikka-owned developer Hattrick, which is owed the money, has now demanded payment by close of business on August 2nd.

Failure to do so would mean an amount of 6.4m euros would become repayable within the two business days of the expiry date.

Zattikka says it has been advised however not to make the transaction, as it may cause issues should it enter administration.

The firm said it is continuing negotiations with its loan note holders to eliminate a “substantial proportion” of the group’s liabilities, but these have so far been unsuccessful.

“In the event that the payment is not made by the Expiry Date, and without an agreement from the Hattrick loan note holders not to enforce their rights, the principal amount under the Hattrick loan notes (an amount of €6.4m) would become repayable in full within 2 business days of the Expiry Date,” read a statement from the company.

“The directors of the Company have received advice that the Company should not make the Interest Payment at this time, as this may, should the Company enter into administration, constitute a preference under the Insolvency Act 1986.

“Further, and again as announced on 9 July 2013, the Group has entered into negotiations with its loan note holders with a view to extinguishing a substantial proportion of the Group’s liabilities. These negotiations have not yet resulted in a consensus outcome but they continue, and the Company will update the market on the result of these in due course.”

Hattrick was one of three studios acquired by Zattikka in April last year, which also included Sneak Games and Concept Art House as it looked to expand its operations globally.

The firm also went public on the London Stock Exchange that month, raising around £12.6 million in the process.  Stock in the firm has now plummeted however, and stands at around £500,000.