RadioShack Corp receives new financing despite sales declines
Consumer electronics company RadioShack Corp said it was able to get fresh financing from various lenders. The company received USD 585 million through a new asset-based lending facility and another USD 250 million in the form of a secured term loan. GE Capital, Salus Capital Partners, CIT Group Inc and the Royal Bank of Scotland Group provided the loan. The company said the loan would give RadioShack additional liquidity worth USD 175 million.
The company received the five-year financing totaling USD 835 million despite posting quarterly net losses for the seventh straight quarter. Bloomberg reported that RadioShack's loss increased to USD 112.4 million in the three months ending September 30. Its total liquidity for the fiscal third quarter was pegged at USD 613 million.
RadioShack had faced tough competition from Best Buy Co and Amazon, causing sales to decline. It had also amassed unwanted inventory that it had to sell it at a huge discount. The new financing would provide RadioShack with a chance to convince vendors to supply the company with the exclusive products not offered by its competitors.