The hedge fund Standard General stated that its offer is RadioShack Corporation (OTCMKTS:RSHCQ) only hope of survival. The offer is of $145.5 million that covers 1,723 outlets can stave off complete liquidation and save as much as 9,000 jobs.
The details
As per the report, everything that is left of RadioShack will go on the auction block with the hedge fund company competing with liquidators over the company’s remains. The other bidders proposed to sell off the inventory and shut down the retailer company. RadioShack made several revival efforts before it filed for bankruptcy in February. The retailer threw almost 50% of its chain into liquidation and believes to finalize a deal by the start of April for the rest.
The offer
Standard General’s takeover proposal is not adequate to meet RadioShack’s debts, which include an anticipated $500 million owed to unsecured creditors. It is even less than previous estimates of the offer as the hedge fund leaves hundreds of retailer’s stores behind. Instead of over 2,000 stores, Standard General would cover only 1,723 outlets. The offer isn’t a sure bet due to ongoing conflict among lenders over the Standard General’s right to bid mostly by proposing to cancel RadioShack debts. As of now, the hedge fund offer requires retailer’s future owner to have only $18.6 million in cash.
The concerns
Creditors are doubtful about the loans the hedge fund entity is attempting to use as currency, and while negotiations are under way about a method that would permit the auction to go forward as designed. Some lenders might wish to see RadioShack given to liquidators in agreements that brings more cash now. Standard General said that it has been supporting retailer since last year, when it provided a financing for a last-ditch measure to avoid bankruptcy.
In last trading session, RadioShack Corporation (OTCMKTS:RSHCQ) stock prices surged more than 23% to close at $0.175 with volume of 2.36 million.
