New York – It’s do or die time for RadioShack, whose remaining assets go to auction on Monday.
Only one bidder, hedge fund and lead lender Standard General, is looking to make a go of the business, the Wall Street Journal reported. The rest of the offers, which were filed in a federal bankruptcy court here on Monday, would lead to the final liquidation of the 94-year-old CE chain.
Standard General’s stalking horse bid was $145.5 million for 1,723 stores, down from its original projection of $200 million for as many as 2,000 or more locations.
The rub, the Journal reported, is that only $18.6 million of the offer is in cash, with the balance in forgiveness of its loans to RadioShack. The bankrupt retailer is estimated to owe about $500 million to unsecured creditors.
Lenders are not pleased, especially after the retailer issued a warning last week that it’s assets won’t likely cover its debts. At least one, Salus Capital Partners, which had thwarted RadioShack’s past attempts to close unproductive stores, has filed suit in an effort to block Standard’s credit bid and recover a $250 million loan it shares with Cerberus Business Finance.
According to the Journal, creditors would sooner see RadioShack’s remaining assets liquidated, prompting Standard General to describe its offer as the retailer’s last remaining hope of survival.
Pending any delay stemming from the Salus lawsuit or the actions of a creditors committed, the auction is set for noon on Monday in the New York offices of RadioShack’s law firm Jones Day.