This week, Remedy has revealed the company has been in talks with Tencent for a convertible loan worth €15 million. In a press release published on Thursday, the developers revealed that the money would be going towards internal developments as it explores self-publishing options.
A convertible loan is one that is delivered with shares, for this deal the conversion price is set at €27.20, meaning that Tencent would receive 811,100 new shares if the deal were to go ahead. The number would represent approximately 5.98% of the company. There is also an 8% PIK non-cash interest per annum paid out on December 31st, and an early repayment option from the third anniversary.
Speaking on the deal, Remedy's CEO, Tero Virtala stated, “Part of Remedy's long-term strategy has been to strengthen our position in the value chain, to have more control over how our games are commercialized, and to grow our share of the value these games can create. As we move towards self-publishing, this financing will support us in developing and fully realizing the potential of the games we have in development and successfully carrying out the commercial activities of our next self-published games. Tencent’s investment demonstrates strong confidence in Remedy's long-term vision and strategy."
If you've been keeping tabs on the quarterly reports that Remedy has been publishing, Tencent may be a familiar name to you. In Q2 2021, they received 3.8% stake in the company, which increased in Q2 2024 to 14%. For several years they were also in talks with Remedy, as they worked on Vanguard (also known by its later name of Kestrel). While the project was discontinued earlier this year, the company has clearly maintained a close working relationship.
The loan isn't going ahead just yet as it still needs approval by Remedy's Extraordinary General Meeting taking place on October 24th 2024, alongside the Board of Directors.
Self-publishing has been something that has been brought up in recent years, though it was following the recent deal with Annapurna that the first public steps were taken place. In the press release, Virtala stated, "This agreement [with Annapurna] will ensure we can develop Control 2 into the best game possible and allows us to move into self-publishing for selected titles and expand our franchises to other mediums."
