'Sale of computer games firms nears completion'

Administrators threw a lifeline today to more than 110 staff of computer games maker Argonaut by revealing that a sale of three subsidiaries may be close.

David Rubin & Partners said they expected to complete the sale of Argonaut Software, Just Add Monsters and Morpheme within the next month.

The news comes after shares in holding company Argonaut Games, based at Edgware in Middlesex, were suspended on October 15 due to a cash crisis.

At the time of its last trading update in August, the computer games maker warned that annual losses for the year to July 31 would be around £6m (€8.6m).

It blamed delays in signing major new development contracts amid tough conditions in the software industry.

In addition to its own titles such as I-Ninja and Kung-Fu Chaos, the group also makes games for the Harry Potter series under license and receives royalty payments.

But weakness in the US dollar against the pound has increased the cost of UK development for major publishers, the majority of which are American.

Argonaut employs 80 staff at its headquarters in Edgware, with 17 staff located at its Morpheme offices in Kentish Town, London, and 22 workers at the Just Add Monsters base in Cambridge.

Another office at Sheffield closed last week and Argonaut has cut its staff from the 268 employed at the end of January to its current level of 119.

Asher Miller, who was appointed joint administrator on Friday, said a number of parties had already shown an interest in buying the three subsidiaries of Argonaut.

“The administrators are confident that an early sale can be finalised,” he said.

“An early sale is always desirable in this sector to minimise any disruption to ongoing games development, to the staff and to the customers.”

As the holding company employing no staff, Argonaut Games has not been placed in administration.