Interplay Ready to Move Forward With Expanded Credit Line, Deals

Irvine gamemaker Interplay Entertainment Corp. said Tuesday that it expanded its credit line and completed several license and distribution deals, moves that it hopes will ease a cash crunch.

The credit expansion allows the software developer to borrow up to $14 million beyond its limit, up to $37.5 million. The line runs through May 31, 1999.

To obtain the additional credit, Chief Executive Brian Fargo offered $5 million of his own funds as collateral.

The financially troubled company had admitted that it is experiencing cash-flow problems, posting sharply higher losses for its third quarter ended Sept. 30. Hoping to head off more problems, Interplay cut its staff by 10% and sliced upper-management salaries last month.

Interplay also said it has licensed to Take-Two Interactive Software Inc. the North and South American publishing rights for one of its popular console titles--Earthworm Jim 3D, for the Sony Playstation and Nintendo 64.

The titles are expected to be released by the middle of next year. Financial details of the licensing agreement were not disclosed.

Interplay officials said the agreement with Take Two, along with some other undisclosed licensing and distribution deals, will receive about $9.7 million over the next three months.

Interplay staff said the increase in its bank credit, along with the product licensing and other non-disclosed deals, will help stem its current cash pressures.

Interplay shares rose 3 cents Tuesday, to $2.03, in Nasdaq trading. The company went public in June, selling shares at $5.50 apiece.