Published October 21, 2013
NEW YORK – RadioShack has secured a fresh round of financing from GE Capital, a person familiar with the matter said on Monday.
The news, which was first reported by the Wall Street Journal, boosted the U.S. consumer electronics chain's shares by about 7 percent to $3.52 on Monday.
Two sources told Reuters earlier this month that General Electric Co's GE Capital, which tends to make large asset-based lending deals, was among many firms that made financing offers to the retailer.
A spokesman for GE Capital declined to comment. A spokeswoman for RadioShack did not return a call seeking comment.
RadioShack had been looking to refinance existing debt to cut borrowing costs and assure vendors and other key partners that it has enough cash to fund turn-around efforts led by Chief Executive Joe Magnacca.
The Journal reported that the new loan, around $835 million, will be secured by existing assets, including inventory.
Sales at RadioShack have been falling rapidly amid executive departures, strong competition and an image problem. Analysts say that despite a ubiquitous presence in the United States, RadioShack has not done enough to transform itself into a destination for mobile phone shoppers or to make itself attractive to younger shoppers.
(Reporting by Dhanya Skariachan; Editing by Phil Berlowitz and Ken Wills)