Standard General, UBS Offer To Save RadioShack

Sep 17 2014 | 6:20am ET

Hedge fund Standard General stands ready to keep RadioShack Corp. a “going concern.”

After the struggling retailer announced a 10th straight quarterly loss and fears for its very existence last week, Standard General and UBS came forward with a plan to replace RadioShack’s $585 million loan and credit facility from GE Capital. The new financing package would give the company more flexibility and readier access to cash.

Under the deal, Standard General would arrange $260 million in financing and UBS $325 million, part of a deal that would keep RadioShack out of bankruptcy. Neither RadioShack nor GE Capital has endorsed the plan.

Standard General would also backstop a planned stock rights offering.

RadioShack said last week that it was down to its last $30.5 million. The company had earlier said it was likely to run out of cash next year.

If the Standard General-UBS deal goes through, it would be the second time this year that the hedge fund has rescued a struggling retailer: In July, it struck a $25 million deal with American Apparel, taking control of that company’s board. One of the appointees agreed upon by Standard General and American Apparel was RadioShack’s CEO, Joseph Magnacca.

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