RadioShack’s stock price is almost wiped out today. It is trading around $0.10 per share at the time of this writing
RadioShack, the struggling, century-old consumer electronics retailer is expected to file for chapter 11 bankruptcy today after reaching an agreement with creditors and other parties, according to report from Bloomberg based on information from people familiar with the situation.
RadioShack to lease stores
RadioShack will be leasing as much as 2,000 stores to Sprint Corporation and Standard General as part of the agreement as part of the agreement, according to the sources. Standard General is the largest shareholder of the electronics retailer.
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The report today also indicated that RadioShack will close its remaining stores out of 4,300 locations in the United States. According to the sources, the parties are still finalizing the details of the bankruptcy agreement, and the filing could be delayed.
Earlier this week, it had been reported that RadioShack is in discussions with Sprint Corporation to sell half of its stores, a sign that it would shut down its operations.
Bloomberg reported that RadioShack’s transaction with Sprint on the sold stores would be co-branded, and the electronics retailer will be able to operate under the store-within a store concept.
There were also speculations that Amazon.com is interested to acquire the stores of RadioShack as part of its initiative into the traditional retail segment. It is uncertain whether both parties entered into discussions.
A consortium of lenders offers bankruptcy loan
A consortium of lenders that provided financing for RadioShack last October agreed to lend more money for the company’s bankruptcy. The new funding will refinance the balance of the group’s loan and provide RadioShack less than $50 million, according to the sources.
The lenders group includes BlueCrest Capital Management, DW Partners LP, Mudrick Capital Management and Saba Capital Management. Last month, it had been reported that Salus Capital Partners offered to a $500 million loan to RadioShack to fund its operations in bankruptcy.
Standard General led a consortium of lenders who provided a $590 million lifeline for RadioShack last year. The group agreed to refinance that company’s outstanding debt under a $535 million asset-backed credit revolving line from GE Capital.
RadioShack’ stock price is almost wiped out
The shares of RadioShack suffered a steep decline and its stock value is nearly $0. The company’s shares were trading ten cents a share, down by more than 9% at the time of this writing around 11:46 A.M. in New York.