Games publisher 3DO has borrowed $3 million from its own chief executive, Trip Hawkins, in a short-term financing agreement, which will help the company to secure an important new line of corporate credit from GE Capital Services.
The arrangement sees Hawkins lending his company the money on a six-month basis, subject to 9.5 per cent interest. Assets in the company have been pledged as collateral for the money, which forms part of a deal with GE Capital Services which promised a $15 million credit line to 3DO if it could raise $4.6 million elsewhere by Oct 1st.
At the time that the new credit line was announced, Hawkins said that he would provide the $4.6 million personally if required; obviously, he has now put his money where his mouth is, in a move which has also boosted stock market confidence in the company, which closed up 9 per cent on the NASDAQ following the news.
3DO recently faced delisting from the NASDAQ for having its shares trading at under $1, but an eight-for-one reverse stock split rescued the listing, and NASDAQ now acknowledges that the stock is back in compliance with the listing regulations.