Exclusive: RadioShack gets new financing offers - sources
By Dhanya Skariachan and Nick Brown
NEW YORK (Reuters) - U.S. retailer RadioShack Corp RSH.N has received several offers for new financing, including one from current lenders Bank of America Corp (BAC.N: Quote) and Wells Fargo & Co (WFC.N: Quote), three sources familiar with the matter told Reuters.
Securing a new financing deal could help RadioShack cut its borrowing costs and assure vendors and other key partners that it has enough cash to fund turnaround efforts led by Chief Executive Joe Magnacca.
General Electric Co's (GE.N: Quote) GE Capital, which tends to make large asset-based lending deals, "is also in the mix," two of the sources said, while a fourth source told Reuters that JPMorgan (JPM.N: Quote) is also considering making an offer.
Representatives for Bank of America, Wells Fargo and RadioShack declined comment. GE Capital and JPMorgan did not respond to requests seeking comment.
After the retailer paid down $214 million of debt due in August 2013 with cash, it still had more than $200 million in cash and about $400 million available on its secured credit facility, which expires in January 2016.
Sales at RadioShack have been in free fall amid executive departures, strong competition and an image problem. Despite its ubiquitous presence in the United States, analysts say it has not done enough to transform itself into a destination for mobile phone shoppers or to become hip to woo younger shoppers.
It reported a wider-than-expected loss in its most recent quarter.
Earlier this week, ratings agency Fitch reaffirmed its 'CCC' long-term issuer default rating on the company, citing "the significant decline" in RadioShack's profitability and cash flow, which has become progressively more pronounced during the last six quarters. Continued...