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Report: RadioShack readying for bankruptcy


Fort Worth, Texas -- RadioShack Corp. is reportedly preparing to file for bankruptcy ads early as the beginning of February 2015. According to the Wall Street Journal, RadioShack is currently in talks with several private equity firms about possibly buying its assets out of bankruptcy.

RadioShack may also seek reduction and restructuring of its debt in bankruptcy court. The retailer stated in a December SEC filing that it may have to file for bankruptcy if it is unable to raise funds or receive permission from lenders to close underperforming stores. RadioShack has posted losses in 11 straight quarters and had about $62 million in cash on hand as of Nov. 1.

Potential relief could come in the form of $500 million from Salus Capital Partners, who has offered to provide a kind of debtor-in-possession loan used by companies to fund operations in bankruptcy. The offer reportedly expires Jan. 15. The unsolicited loan would replace a financing package worth $585 million that the struggling consumer electronics retailer obtained in 2013. Debtor-in-possession loans generally give the lenders a great deal of sway over a bankruptcy.

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