RadioShack Said to Boost Liquidity With New Financing
RadioShack Corp. (RSH), the unprofitable consumer-electronics seller, received commitments for $835 million in new financing, said a person with knowledge of the matter, replacing its existing $625 million credit facilities.
The lenders include GE Capital, Salus Capital Partners LLC, CIT Group Inc. (CIT) and Royal Bank of Scotland Group Plc, said the person, who asked not to be named because the process is private. The new credit line boosts RadioShack’s liquidity as the company tries to persuade suppliers to support its turnaround efforts after it lost $139.4 million last year.
Chief Executive Officer Joe Magnacca is counting on vendors to supply exclusive products to help the Fort Worth, Texas-based company distinguish its offerings from rivals’ merchandise. RadioShack has posted six straight quarters of net losses and declining sales as customers defect to big box retailers such as Best Buy Co. and online competitors including Amazon.com Inc.
Merianne Roth, a spokeswoman for RadioShack, didn’t reply to a telephone call and e-mail seeking comment. Representatives for Salus and GE Capital declined to comment, while spokesmen for RBS and CIT didn’t respond to messages seeking comment left outside normal business hours.
The financing will comprise $585 million in new first-lien loans and $250 million in second-lien credit, said the person familiar with the situation. Parts of the new financing package were reported earlier by the Wall Street Journal.
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