February 5, 2015 / 10:35 PM / 3 years ago

RadioShack files for bankruptcy, sell up to 2,400 stores

(Reuters) - Electronics retailer RadioShack Corp filed for U.S. bankruptcy protection on Thursday and said it had a deal in place to sell as many as 2,400 stores to Sprint and an affiliate of hedge fund Standard General, its lender and largest shareholder.

A RadioShack store is pictured in the Manhattan borough of New York January 15, 2015. REUTERS/Carlo Allegri

RadioShack, which posted losses in 11 consecutive quarters after failing to transform itself into a destination for mobile phone buyers, said in a statement that the Standard General affiliate, called General Wireless, and Sprint will acquire between 1,500 and 2,400 of its more than 4,000 stores, creating a co-branded retail presence in up to 1,750 of them.

Sprint would effectively operate a store within a RadioShack store, selling “mobile devices across Sprint`s brand portfolio as well as RadioShack products, services and accessories,” Sprint said in a statement.

RadioShack also reached a deal with liquidation firm Hilco to shutter underperforming stores. Potential buyers will be able to bid on RadioShack’s assets during bankruptcy, the company said.

“These steps are the culmination of a thorough process intended to drive maximum value for our stakeholders,” RadioShack Chief Executive Joe Magnacca said in the statement.

RadioShack listed $1.2 billion of assets and $1.39 billion of debts in its Chapter 11 filing in U.S. Bankruptcy Court in Delaware. It said it has an agreement with a lender group led by DW Partners for a $285 million loan to operate while in bankruptcy.

The case is In Re: RadioShack Corp, Delaware Court, District of Delaware, Case No: 15-bk-10197.

Reporting by Ramkumar Iyer and Sruthi Ramakrishnan in Bengaluru; Editing by Saumyadeb Chakrabarty and Cynthia Osterman

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