New York – Having just emerged from bankruptcy with a new owner and a clean slate, RadioShack is once again taking on debt.
The chain, now run by hedge fund Standard General through its specially-created General Wireless unit, has received $75 million in financing.
The package includes a $50 million asset-based revolving credit facility led by RBC Capital Markets, and a $25 million senior secured first-in last-out (FILO) term loan led by Great American Capital Partners (GACP).
“This financing gives RadioShack the flexibility and support to fully implement its strategic plan,” said Soo Kim, managing partner and chief investment officer of Standard General. “GACP has been an invaluable partner and we plan to build upon our relationship as we take RadioShack to the next level in its strategic development.”
GACP president John Ahn said his company and its affiliates worked closely with General Wireless throughout the process, and performed an inventory appraisal of the 1,733 continuing RadioShack stores that were acquired by Standard General in a bankruptcy auction.
“We look forward to continuing to support General Wireless as it executes its strategic plan to revitalize RadioShack’s iconic brand and retail business,” Ahn said.
The bankruptcy left RadioShack with about one-quarter of its former store count – considered a more viable level that was long sought by former CEO Joe Magnacca, but blocked by asset-based lenders.
About 1,400 of the remaining stores are being co-branded in a joint leasing deal with Sprint, and another 600 RadioShack showrooms are owned and operated by independent franchisees.