RadioShack Shares Rise On Rumored HF Lifeline

Jan 14 2015 | 10:08am ET

The offer of a bankruptcy loan has apparently put some wind in RadioShack's sails (if not its sales).

The electronics retailer's stock rose about 18% on a Wall Street Journal report that Salus Capital Partners will provide a $500 million debtor-in-possession loan to fund the firm's operations in bankruptcy.

According to the Journal, the offer expires Thursday.

Needham Heights, Mass.-based Salus led a $250 million loan for RadioShack in late 2013 but has since refused to approve RadioShack CEO Joe Magnacca's plan to close 1,100 stores. Salus accused the retailer of defaulting on that loan in late 2014, a charge RadioShack denies.

RadioShack has not announced plans to declare bankruptcy, but observers believe it may be in the cards—according to the WSJ, the firm ended Q3 2013 with total liquidity of $62.6 million ($43.3 million in cash and $19.3 million in potential borrowings). Its debt totaled $841.5 million.


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