Embracer Group raises over $180 million through direct share issue as its restructuring moves forward

Embracer Group has issued 80 million new B shares. The raised funds will help the Swedish holding company achieve certain goals as part of its restructuring program.

• According to the official announcement, Embracer Group will receive SEK 2 billion ($183 million) through the direct share issue.
• The subscription price is SEK 24 per B share, and the company noted that the issue “has been signficiant demand.”
• Following the issue, the company also lowered the net debt target from SEK 10 billion ($913 million) to SEK 8 billion ($730 million) for the fiscal year ending March 31, 2024. The adjusted EBIT guidance remained unchanged at SEK 7-9 billion ($660-840 million).
• “While the restructuring program is developing according to plan, the proceeds from this share issue will further strengthen our financial position, improving both financing cost and our operational flexibility, and enabling us to focus on the key aspects of the program,” CEO Lars Wingefors said in a statement.

Embracer Group announced the restructuring program last month, shortly after its stock nearly halved due to the collapse of an unannounced $2 billion deal. During the process, which will last until March 2024, it will try to transform the company from its current “heavy-investment-mode to a highly cash-flow generative business.”

This includes divestment of some of the in-house studios, closure of unannounced games, reduction of third-party publishing, and cost cuts. Embracer will also conduct layoffs, but it is unclear how many employees will be affected by the job cuts.