RadioShack reaches refinancing deal with Standard General
Cash-strapped electronics retailer RadioShack Corp has reached an agreement with a consortium led by its largest shareholder Standard General LP to refinance about $590 million of loans to re-stock ahead of the holiday season, Bloomberg reported, citing a person familiar with the matter.
The 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 unit of General Electric Co, Bloomberg said. (bloom.bg/1uFZbO0)
RadioShack said last month it may need to file for bankruptcy protection if its cash situation worsens. The company said it was also exploring other options, including a sale or an investment, and liquidation as the last resort.
Last week, Standard General said it was in talks to improve RadioShack's cash position ahead of the crucial holiday season. The hedge fund also raised its stake in RadioShack to 9.8 percent from 7.08 percent, becoming the company's largest shareholder.
Standard General and certain new investors would invest in the credit facility, and the investors have committed to provide draft financing to fund the transaction, the hedge fund said in a regulatory filing.
RadioShack and Standard General did not immediately respond to a request for comment outside regular U.S. business hours.