Business
RadioShack Corp., the electronics chain trying to stave off bankruptcy, reached an agreement with a consortium led by Standard General LP to refinance about $590 million of loans to re-stock ahead of the holidays, a person familiar with the matter said. Bloomberg News reports:
Standard General, a New York-based hedge fund, will lead a group of lenders to refinance debt outstanding under a $535 million asset-backed revolving credit line from GE Capital, the lending arm of General Electric Co., said the person, who asked not to be identified because the negotiations are private.
The pact also includes refinancing of some additional debt, the person said. Last month, Standard General said in a filing it’s working to improve RadioShack’s liquidity ahead of the holiday season.
The fund, RadioShack’s largest investor, entered into an agreement lasting until June 2015 that prevents it from taking over the board or proposing an acquisition or restructuring without RadioShack’s consent.
The refinancing gives Fort Worth, Texas-based RadioShack access to more cash and greater flexibility, since the current debt agreement restricts how much money it can draw from the revolver, according to a Dec. 13 filing with the U.S. Securities and Exchange Commission. It may provide the retailer enough leeway to close a larger number of underperforming stores, helping the company burn less cash.
Forget the concerns that RadioShack Corp.’s days could be numbered. The beleaguered electronics retailer has a message for the faithful: It’s got some cool holiday toys to sell. MarketWatch reports:
At least that was the message at a Tuesday press event, held at one of the chain’s New York stores. Representatives from RadioShack and product manufacturers talked up a range of gizmos and gadgets and offered attendees free cupcakes (adorned with the company logo, of course) and while-you-wait smartphone repairs.
Meanwhile, RadioShack is badly in need of a fix itself. Faced with possible bankruptcy, the company has pinned its hopes of late on a cash infusion from hedge-fund investor Standard General.
The news was enough to lift the company’s stock above the one-dollar mark for the first time since the start of summer, but Wall Street analysts and market observers remain skeptical as to whether RadioShack can remain relevant in an era when consumers increasingly turn to big-box stores or online retailers for their electronics needs.
