Circuit City in sales talks with two parties

RICHMOND, Va. Circuit City Stores announced that it is in discussions with two parties who are considering providing additional financing to allow the company to sustain operations and move forward with a subsequent restructuring through a stand-alone plan and/or purchasing the company or all or substantially all of the company's assets.

On Jan. 5, 2009, the company filed a motion with the Bankruptcy Court that seeks approval of procedures that would formally put the company up for sale, as a going concern, as separate business units or as individual assets - including the sale of inventory.

Circuit City's discussions with the interested parties could result in a sale agreement, or the company and the lenders could further amend the DIP credit agreement prior to the Jan. 16, sale hearing. If no agreement is approved with a party interested in a going concern transaction by Jan. 16, and the auction does not result in a sale of the company's assets, the motion provides that the company may enter into a transaction that will result in an asset liquidation process commencing soon after the sale hearing scheduled for Jan. 16, absent any further amendment to the DIP credit agreement deadlines.