RadioShack Corporation (NYSE:RSH), the struggling electronics retailer trying to prevent bankruptcy received a $590 million lifeline from a consortium of lenders led by Standard General LP, according to Bloomberg based on information from a person familiar with the situation.

RadioShack

The stock price of RadioShack Corporation (NYSE:RSH) surged as much as 67% to $1.65 per share driven by the report during the early trading. The struggling electronics retailers lost 62% of its value prior to its gain today.

RadioShack’s refinancing agreement

According to the report, Standard General, a hedge fund based in New York is leading a group of lenders to refinance the outstanding debt of RadioShack Corporation (NYSE:RSH) under a $535 million asset-backed credit revolving line from GE Capital.

Standard General’s agreement with RadioShack Corporation (NYSE:RSH) also include refinancing additional debt, according to the person who requested anonymity due to the private nature of the negotiations. The person said the electronics retailer is expected to use the financing to restock its inventory before the holiday season.

Stopgap measure

BB&T Capital Markets analysts Anthony Chukumba commented that deal would provide enough funding for RadioShack Corporation (NYSE:RSH) until the critical year-end shopping. However, he emphasized that the refinancing did not change its long-term situation.

“This is a stopgap measure. It will get them through the 2014 holidays. This does not in any way, shape or form guarantee their long-term viability.”

RadioShack Corporation (NYSE:RSH) suffered losses over the past ten consecutive quarters as it failed to strengthen its competitiveness against discount and online retailers such as Amazon.com, Inc. (NASDAQ:AMZN).

Last month, RadioShack Corporation (NYSE:RSH) posted $137 million losses or $1.35 losses per diluted share from continuing operations for the second quarter. Its revenue declined from $861.4 million to $673.8 million. Its comparable store sales dropped 20% during the period.

Joseph Magnacca, CEO of RadioShack Corporation (NYSE:RSH) said they are working hard on a turnaround plan such as debt restructuring, store base consolidation program and other measures to reduce the company’s cost structure significantly.

RadioShack bankruptcy imminent

Early in September, Wedbush analyst Michael Pachter warned that a bankruptcy reorganization was imminent for RadioShack Corporation (NYSE:RSH) According to him, the shares of the electronics retailer is worth $0.