Star Citizen Studio Responds To Studio In Financial Crisis

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Star Citizen fans noticed that developer Cloud Imperium Games appeared to have taken out a massive loan from Coutts, a UK banking institution, with the entire company given as collateral. This sparked fears that the studio was facing financial problems. However, Cloud Imperium stated that the the appeared loan was really an advance on a tax rebate.

“Our UK companies are entitled to a Government Game tax credit rebate which we earn every month on the Squadron 42 development. These rebates are payable by the UK Government in the fall of the next following year when we file our tax returns,” CIG co-founder and legal counsel Ortwin Freyermuth explained in a forum post.

“Foundry 42 and its parent company Cloud Imperium Games UK Ltd. have elected to partner with Coutts, a highly regarded, very selective, and specialized UK banking institution, to obtain a regular advance against this rebate, which will allow us to avoid converting unnecessarily other currencies into GBP. We obviously incur a significant part of our expenditures in GBP while our collections are mostly in USD and EUR. Given today’s low-interest rates versus the ongoing and uncertain currency fluctuations, this is simply a smart money management move, which we implemented upon recommendation of our financial advisors.”

As for the collateral, Freyermuth described it as “absolutely standard and [pertaining] to our UK operation only.” The “prime collateral” on the loan is actually the rebate entitlement itself, he continued, and while the UK-based companies guarantee repayment, the posting of other collateral—which, he noted, “specifically excludes Star Citizen”—”is a formality and nothing else.”

“This security does not affect our UK companies’ ownership and control of their assets,” Freyermuth wrote. “Obviously, the UK Government will not default on its rebate obligations which will be used for repayment, and even then the UK companies have ample assets to repay the loan.”

You can read his whole statement here. Star Citizen itself is excluded from the collateral this agreement requires; further, Cloud Imperium views this as a formality and believes that “the UK Government will not default on its rebate obligations.

The release of the 3.0 alpha was slated for the end of June, but was pushed back to August “aim date” release window.

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Editor-in-Chief at Victory Point. When I am not talking about video games, I am regrettably cheering for the San Jose Sharks, San Diego Chargers, and Phoenix Suns on Twitter.