RadioShack Corp. said Tuesday it has received notice from Harbinger Group Inc. unit Salus Capital Partners claiming it is in breach of covenants on a $250 million term loan provided by Salus and Cerberus Business Finance. "RadioShack believes these claims are wrong and self-serving," the electronics retailer said in a statement. RadioShack is now planning to contest the claims and has heard from lenders holding a majority of the loans and commitments that they will continue to extend credit to the company."Despite their intimate knowledge of the challenges that RadioShack faced when they extended credit to us late last year, our current term lenders have repeatedly blocked our efforts to accelerate and intensify our turnaround and make smart decisions for our business," Chief Executive Joe Magnacca said in the statement. In addition to the turnaround measures already undertaken, RadioShack is planning further cost cuts, which could yield another $200 million in savings, he said. The company wanted to close up to 1,100 stores to focus on profitable locations, but was blocked by its term lenders from doing so. Shares were halted in early trade, but were down 1.3% at 77 cents before the halt.
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