The only question now is whether RadioShack declares bankruptcy before Christmas or shortly thereafter. The fat lady is singing and there will be thousands of Space Available signs coming to malls near you.
RadioShack again denies defaulting on loan
By Chelsey Dulaney
Published: Dec 8, 2014 7:29 a.m. ET
RadioShack Corp. on Monday again denied that it has defaulted on a loan from its term lenders, less than a week after the struggling electronics chain initially disputed the allegations as “wrong and self-serving.”
The lenders–Salus Capital Partners and Cerberus Capital Management–a year ago provided a $250 million lifeline that helped keep RadioShack in business. They now say RadioShack RSH, +0.00% defaulted on the loan when it secured a separate credit line in October.
The default claim follows the lenders’ efforts to block RadioShack’s plan to close up to a quarter of its roughly 4,300 U.S. outlets and free up about $200 million in costs.
RadioShack on Monday said it doesn’t believe the lenders’ demand for immediate payment has any merit. The company also said that the amount of revolving loan commitments remains $535 million.
The spat is the last thing RadioShack needs as it tries to sell enough headphones, speakers and other electronic gizmos to make it through to January, when a further recapitalization is due to happen. It comes in the middle of the critical holiday selling period, when retailers generate up to a fifth of their annual revenue.
