Glu Mobile shores up financial position

It's been looking pretty dicey for Glu Mobile (NASDAQ: GLUU) lately, with revenues for Q3 below expectations, dwindling cash reserves and the upcoming earnout and bonus payments related to its acquisition of MIG.

However, Glu has moved to shore up its financial situation on the latter two counts. The publisher has secured a new credit facility with Silicon Valley Bank, extending its $8 million line of credit until the end of 2010.

Meanwhile, Glu has restructured the MIG payments, converting the $25 million due to cash, and deferring $11 million of it until 2010.

Specifically, Glu will pay MIG's shareholders $6 million on January 15th, $3 million on April 1st and $5 million on July 1st next year (2009). The remaining $11 million will be paid in four equal quarterly installments during 2010.

"The restructuring of the MIG payments and line of credit extension substantially improves Glu’s liquidity," says CEO Greg Ballard.

"With these developments, we can now focus on increasing shareholder value by improving our existing carrier business and building our presence on new high end handsets and platforms that are gaining traction in the mobile market."

That remains the challenge for 2009 - making the most of platforms like iPhone, Android and N-Gage.

Glu predicts that it will be cash flow positive from its operations in 2009, and has forecast revenues of around $57 million for the year.

However, that's 10-15% DOWN on 2008, which the publisher says is due to "continuing declines in foreign exchange rates and increasing economic headwinds".

That makes Glu the first mobile games publisher to predict that its revenues will decline in 2009.