– RadioShack files for bankruptcy; Sprint to take over some stores (Reuters)
– RadioShack Files For Bankruptcy (ZeroHedge, Feb 5, 2015):
As credit markets have been indicating for 15 months, 94-year-old consumer-electronics chain RadioShack has finally pulled the ripcord…
- *RADIOSHACK FILES FOR BANKRUPTCY PROTECTION AS LOSSES MOUNT
- *RADIOSHACK WILTS UNDER BIG-BOX, ONLINE COMPETITION
RadioShack lists $1.2bn in assets and $1.38bn in debt. Additionally, Bloomberg reports that a post-bankruptcy deal is being worked on with Sprint.
- RadioShack Reaches Asset Purchase Agreement with Affiliate of Standard General To Acquire up to 2,400 Stores
- Standard General and Sprint to Establish “Store within a Store” Retail Model at up to 1,750 Acquired Stores
- Will Pursue Asset Sale and Additional Restructuring Steps Through Court-Supervised Chapter 11 Process
- Secures Debtor-in-Possession Loan Commitment To Support Sale Process
- Plans to Close Remaining Underperforming Stores
FORT WORTH, Texas, Feb. 5, 2015
FORT WORTH, Texas, Feb. 5, 2015 /PRNewswire/ — RadioShack Corporation announced today several actions intended to maximize value for the Company’s stakeholders.
1. RadioShack has signed an asset purchase agreement with General Wireless Inc., an affiliate of Standard General L.P. (“Standard General”). General Wireless has agreed to acquire between 1,500 and 2,400 of RadioShack’s U.S. Company-owned stores. To effectuate this transaction and an orderly sale of the Company’s remaining assets, RadioShack and certain of its U.S. subsidiaries have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. As part of this process, other parties will have an opportunity to submit offers for RadioShack’s assets in a court-approved process. The sale agreement is subject to court approval and other conditions. RadioShack’s foreign subsidiaries and its franchisee-owned stores are not included in the filing.
2. General Wireless, the entity formed to acquire the stores under the asset purchase agreement, has agreed in principle on terms with Sprint to establish a new dedicated mobility “store within a store” retail presence in up to 1,750 of the acquired stores. This agreement-in-principle is subject to negotiation of definitive documentation as well as court approval.
3. In addition, the Company has filed a motion with the Court to proceed with the closure of the remaining company-owned stores under an agreement with Hilco Merchant Resources. A list of the stores slated for closure will be posted in the near future on the restructuring information section of the company’s web site at www.radioshackcorporation.com. Stores that are closing are expected to sell remaining inventory.
RadioShack currently has approximately 4,000 company owned stores in the U.S. Its more than 1,000 dealer franchise stores in 25 countries, the stores operated by its Mexican subsidiary, and its Asia operations are not included in the Chapter 11 filing or the agreements announced today.
Discussions are underway with interested parties to sell all of the company’s remaining assets.
Joe Magnacca, RadioShack’s chief executive officer, said, “These steps are the culmination of a thorough process intended to drive maximum value for our stakeholders.”
RadioShack has made customary first-day motions with the Bankruptcy Court intended to support the continuation of its day-to-day operations for customers, employees, vendors and suppliers, and other business partners during the restructuring. As part of that, it is seeking Court approval to continue employee wages and certain benefits and honor certain customer programs. The motions are expected to be addressed by the Court in the coming days.
The Company has also secured a commitment for approximately $285 million in debtor-in-possession financing (DIP) from its current ABL lender group, led by DW Partners, LP. The DIP is intended to provide it with liquidity during the sale process. The DIP funding includes a roll up of the Company’s prepetition revolver, letters of credit, and FILO facility. In addition, the facility will provide up to $20 million in incremental borrowing capacity.
Pursuant to the auction process the Company has filed for approval by the Court, all qualifying parties will have an opportunity to submit offers for evaluation through a Court-supervised competitive bidding process. Any sale will be subject to Court approval and other closing conditions. There can be no assurance that a sale will be consummated at the conclusion of this process.
The Company’s legal advisor is Jones Day, its investment banker is Lazard Freres, and its financial advisors are The MAEVA Group and FTI.
It’s been a wild ride for stocks…
Bloomberg additionally reports,
RadioShack completing deal with Sprint that would let company name live on as store-within-a-store in as many as 1,750 locations, a person familiar with the deal tells Bloomberg’s Jodi Xu Klein.
RadioShack to sell 1,500 to 2,400 stores to Sprint and Standard General LP, rest would be closed as part of bankruptcy filing, which may be imminent
1 thought on “RadioShack Files For Bankruptcy”
This is the perfect picture of America today, greedy gut corporations eating their own. Radio shack was a national corporate chain, but very old…….now, Sprint eats them up. No protection for the consumer, the only refuge they have is to buy online where government can track every purchase.
Not only are the last remaining American companies being destroyed, they are being swallowed by bigger greedy gut corporations. Radio Shack was a place where people could go when they needed new items, and there was always someone to help. Unfortunately, they served a market that is dying off, people like me who want to use land line phones, ETC, rather than an electronic leash called a smart phone. It is harder to listen in, I guess.