PCF GROUP (PEOPLE CAN FLY) ultimately offers series F shares almost entirely to KRAFTON. The value of the offering is over pln 134 million.

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1 June 2023

After conducting the book-building process, PCF Group has decided to offer about 3.34 million series F shares at a price of PLN 40.20 per share. The offering will be directed almost entirely to Krafton, a South Korean publisher and developer of games, with which PCF previously concluded an investment agreement. The total value of the offering will thus be about PLN 134.4 million.

“We decided to set the issue price for the series F shares at the same level as the price specified in the investment agreement with Krafton, i.e. PLN 40.20 per share, and to finally offer the new shares almost entirely to Krafton, under the terms specified in the investment agreement,” said Sebastian Wojciechowski, CEO and the largest shareholder of PCF Group. “Thus the total value of the offering will be about PLN 134.4 million, which is obviously lower than we anticipated raising in the SPO. We are nonetheless confident of the soundness of our adopted development strategy, and intend to pursue it while seeking additional sources for financing it in the future.”

Under the investment agreement concluded in March 2023, Krafton undertook to subscribe for series F shares constituting 10% of the share capital after the offering.

The development strategy of the People Can Fly group updated in January 2023 calls for releasing most games from the group’s portfolio in the self-publishing model. The strategic target of PCF Group is to generate at least PLN 3 billion in combined revenues in 2023–2027, nearly five times more than in 2018–2022.

People Can Fly is currently working on seven projects at various stages of advancement. Four of them are games from the AAA segment, one of which, Project Gemini, is already in the production phase and is being carried out in the work-for-hire model commissioned by Square Enix, the group’s long-time publisher. Three further games from the AAA segment—Project Dagger, Project Bifrost and Project Victoria—are in the pre-production phase, and the company plans to release them in the self-publishing model, with launches planned for 2025–2026. Another game is Project Red, from the compact-AAA segment, currently at the concept phase. In addition, the People Can Fly portfolio includes two games for virtual reality (VR) platforms—Bulletstorm VR and Green Hell VR—developed by Incuvo, a subsidiary of PCF Group.

To implement the updated strategy, the company also plans to use its own cash, current operating cashflows, and other available sources of financing.

A subsidiary of PCF Group, People Can Fly Canada, recently concluded an agreement with the Bank of Montreal for granting of two working-capital loans, of up to CAD 1.2 million (c. PLN 3.7 million) to finance working capital and general corporate needs of PCF Canada, and up to CAD 8.0 million (c. PLN 24.8 million) to prefinance future tax credits in Canada.

This week PCF Group announced the beginning of negotiations with Bank Pekao on a grant of credit of up to PLN 50 million to finance costs associated with for-hire development of games.

Alongside expansion of its own publishing activity, the strategy of the People Can Fly group also provides for the possibility of cooperating with renowned partners in the work-for-hire model. Contracts of this type provide financial stability for PCF Group and also room for experimentation and growth.

A week ago PCF Group reported on the ongoing negotiations for conclusion of a development and publishing contract with a renowned global publisher. If these negotiations are successful, a new project will be added to the portfolio of games being developed by People Can Fly.

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People Can Fly was founded in 2002 and is one of the pioneers on the market for shooter games in Europe, and one of the top three most experienced Polish developers of games from the AAA segment. People Can Fly has developed such games as Painkiller (launched in 2004), Bulletstorm (2011), Gears of War: Judgment (2013) and Outriders (2021).

There are currently over 640 people working in the group, two-thirds of them in Europe and one-third in North America, of whom 450 are game developers.

In January 2023 the group updated its growth strategy, with the aim of strengthening the group’s publishing activity and implementation of most projects in the self-publishing model and in the game-as-a-service model. The company also intends to continue expanding its teams of game developers.

The shares of PCF Group, which owns the People Can Fly studio, have been listed on the Warsaw Stock Exchange since December 2020.

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