Game Group Surges as Retailer Gets Bank Lifeline: London Mover
Game Group Plc (GMG), the U.K.’s biggest independent video-games retailer, rose as much as 48 percent in London trading after reaching a deal with lenders to stay in business and forecasting a smaller-than-estimated annual loss.
Banks led by Royal Bank of Scotland Group Plc (RBS) have agreed to a revision of lending provisions that will allow the company to continue operating, Basingstoke, England-based Game Group said today in a statement.
Under the amended terms, the company will “operate within lower limits of its existing facilities than was previously available,” according to Game Group, which had net debt of 91 million pounds ($144 million) as of July 31.
The shares, which reached a record of 300 pence in May 2008, were up 24 percent at 6.61 pence as of 8:44 a.m. They fell to the lowest since 1989 last month after the company reported a slump in holiday sales and said it may not meet some covenants.
“We’re pleased to reach agreement with our lenders, but should be under no illusions about the challenges in our market or the hard work required to deliver our strategic plan,” Chief Executive Officer Ian Shepherd said in the statement.
Game Group said its pretax loss for the year ended Jan. 31 was about 18 million pounds, excluding non-recurring item. The average estimate of nine analysts compiled by Bloomberg was for a loss on that basis of 23.7 million pounds.
To contact the editor responsible for this story: Sara Marley at firstname.lastname@example.org