RadioShack Closes New Five-Year Financing Totaling $835 Million
FORT WORTH, Texas, Dec. 10, 2013
FORT WORTH, Texas, Dec. 10, 2013 /PRNewswire/ --RadioShack Corporation (NYSE:
RSH) announced today that it has completed a new financing totaling $835
million including a $585 million senior secured ABL credit facility led by GE
Capital, Corporate Retail Finance and a $250 million secured term loan led by
Salus Capital Partners, LLC. This comprehensive new financing will be used to
refinance existing debt and provide approximately $200 million of incremental
liquidity, all of which will further strengthen the Company's balance sheet as
it continues to move forward with its operational turnaround.
Joseph C. Magnacca, chief executive officer, said, "In July, we outlined the
five pillars of our turnaround plan: reposition the brand, revamp the product
assortment, reinvigorate the store experience, operational efficiency and
financial flexibility. This new financing fulfills the last pillar and
provides the financial flexibility and ample runway to turn this business
around. We are pleased to have a consortium of leading finance companies
partner with us and participate in this new financing. With our financing
completed and the progress we have made recently on our other pillars, we are
focused on delivering a great RadioShack experience for the millions of our
customers who choose to shop with us this holiday season."
Jim Hogan, senior managing director, GE Capital, Corporate Retail Finance,
said, "Our business is helping retailers with efficient capital support for
their operations including retailers that are in the midst of transition. We
are pleased to be the lead arranger for the new facility and support the
RadioShack team as they work to successfully turn around this longstanding
brand in the retail landscape."
Andrew H. Moser, President and CEO of Salus Capital said, "As we look to
partner with companies that need creative commercial financing, including
capital to fund an operational turnaround driven by a new management team, we
areexcited to help RadioShack fuel the next stage in its development."
The new ABL credit facility was arranged and led by GE Capital, Corporate
Retail Finance and has been syndicated to CIT Corporate Finance and RBS
Citizens, N.A. The terms include a five-year duration, a $535 million
revolving line of credit and a $50 million term loan. The term loan is a
first-in-last-out term loan which was drawn and funded at closing and carries
a rate of LIBOR plus 4%. This new facility is secured by the inventory and
accounts receivable of the Company's U.S. operations.
The new $250 million secured term loan was led by Salus Capital. The terms of
this loan include a five-year duration and a rate of LIBOR plus 11%. This
term loan was drawn and funded at closing and is secured by a second lien on
the assets securing the new ABL credit facility and a first lien on certain
other assets of the Company.
Peter J. Solomon Company acted as financial advisor to RadioShack on the new
The Company has exited the existing $450 million ABL credit facility and the
two accordions totaling $75 million and has retired an existing $100 million
second lien term loan. With this new financing and the existing $325 million
of 6.75% unsecured notes due in 2019, the Company has approximately $625
million dollars of debt outstanding.
This press release contains forward-looking statements, as referenced in the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements reflect management's current views and projections regarding
economic conditions, the retail industry environment and Company performance.
These statements can be identified by the fact that they include words like
"anticipate," "believe," "estimate," "expect," "intend," "project,"
"guidance," "plan," "outlook" and other words with similar meaning. We
specifically disclaim any duty to update any of the information set forth in
this press release, including any forward-looking statements. These statements
involve a number of risks and uncertainties that could cause our actual
results to differ materially from the results discussed in our forward-looking
statements. Factors that could cause our actual results to differ materially
from the results discussed in our forward-looking statements include, but are
not limited to, our ability to execute and the effectiveness of our 2013
initiatives; our ability to complete the new debt financings on the terms
contemplated by the commitments in the fourth quarter of 2013 or at all; the
underperformance or loss of certain of our important vendors, such as our
wireless carrier providers, or breaches by them of our agreements with them;
an adverse impact on our sales or profitability due to changes wireless
carrier providers make to their customer credit requirements, frequency of
upgrade eligibility, or other operational matters, and the timing,
completeness, and accuracy of information we receive about such changes; a
decline in our gross margin due to customer demand for lower margin mobile
devices, such as smartphones and tablets; overall sales performance; economic
conditions; product demand; expense levels; competitive activity; interest
rates; changes in the Company's financial condition; availability of products
and services and other risks associated with the Company's vendors and service
providers; the regulatory environment; and other factors affecting the retail
category in general. Additional information regarding these and other factors
is included in the Company's filings with the SEC, including its most recent
Annual Report on Form 10-K for the year ended Dec. 31, 2012.
ABOUT RADIOSHACK CORPORATION
RadioShack (NYSE: RSH) is a leading national retailer of innovative mobile
technology products and services, as well as products related to personal and
home technology and power supply needs. RadioShack^® offers consumers a
targeted assortment of wireless phones and other electronic products and
services from leading national brands, exclusive private brands and major
wireless carriers, all within a comfortable and convenient shopping
environment. RadioShack employs approximately 30,000 knowledgeable and helpful
sales experts globally. RadioShack's retail network includes approximately
4,300 company-operated stores in the United States, over 270 company-operated
stores in Mexico, and approximately 1,000 dealer and other outlets worldwide.
For more information on RadioShack Corporation, please visit
www.radioshackcorporation.com; to purchase items online, please
visitwww.radioshack.com. RadioShack^® is a registered trademark licensed by
Analyst and Investor Contact: News Media Contact:
Bruce Media Relations
(817) (817) 415-3300
SOURCE RadioShack Corporation
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