Bankruptcy Filing For RadioShack Corporation (RSH)
Push has come to a shove for RadioShack Corporation (NYSE:RSH). The electronics retailer is said to be preparing to make a bankruptcy filing as soon as next month. The filing could actually come in the first week of next month, suggesting how serious things have got for RadioShack. The company has already contacted some lenders to support it with a loan to fund operations during the bankruptcy period. It is not certain whether RadioShack would sell assets in the bankruptcy case or look to other debt-restructuring opportunities that may be available to it.
Deal not certain
RadioShack Corporation (NYSE:RSH) is said to be in discussions with a private-equity firm in what could yield a deal to sell RadioShack assets out of bankruptcy. However, there is no guarantee that a deal would be sealed between the company and the private-equity firm. If talks with the private-equity firm fail to produce a favorable deal, the retailer may seek to try debt reduction and restructuring arrangements with its lenders in the bankruptcy court. However, this being a bankruptcy situation, things can always change at the last minute.
Lenders prevent store closure
In a security filing last month, RadioShack warned that it could file for bankruptcy protection if it failed to raise enough funds or its lenders continued to be tough on it. The company attempted last year to close nearly 1,100 stores in an effort to cut costs so that it could keep its business going. However, the plan was rejected by its lenders, citing an agreement that prevents the company from closing over 200 stores to preserve cash. The development only complicated matters for a company that was already facing almost acute financial a shortage.
RadioShack Corporation (NYSE:RSH) disclosed in November that it had a total of $62.6 million, which included $19.3 million in credit facility and $43.3 million in cash. However, given its nearly 4,300 stores in North America, the available cash was very small.
RadioShack Corporation (NYSE:RSH) has currently preferred not to discuss details of its bankruptcy plans.
Latest posts by Neha Gupta (see all)
- Is Facebook Inc (NASDAQ:FB) Winning Or Losing In Virtual Reality Space? - May 27, 2016 07:35 AM PDT
- No Growth In Costco Wholesale Corporation (NASDAQ:COST)’s 3Q Comps Explained - May 27, 2016 07:34 AM PDT
- How Will International Business Machines Corp. (NYSE:IBM)’s Big Data University Help? - May 27, 2016 07:33 AM PDT