By Dhanya Skariachan and Nick Brown
NEW YORK Oct 21 RadioShack Corp has
secured a fresh round of financing from GE Capital, two people
familiar with the matter said on Monday.
The news, which was first reported by the Wall Street
Journal, boosted shares of the U.S. consumer electronics chain
by 7 percent to $3.52 on Monday.
General Electric Co's GE Capital will extend $835
million in new financing secured by inventory and other assets -
$585 million in the form of a credit facility and $250 million
in a second-lien term loan, one of the people said.
Reuters reported earlier this month that GE Capital, which
tends to make large asset-based lending deals, was among many
companies that made financing offers to the retailer.
RadioShack had been looking to refinance existing debt in
part to cut borrowing costs. The company's previous lenders, led
by Bank of America Corp and Wells Fargo & Co,
had also made offers for new financing, but GE offered a more
attractive advance rate, one of the people said.
A spokesman for GE Capital declined to comment. A
spokeswoman for RadioShack did not return a call seeking
New capital could help assure vendors and other key partners
that RadioShack has enough cash to fund turnaround efforts led
by Chief Executive Joe Magnacca.
Sales at RadioShack have been falling rapidly amid executive
departures, strong competition and an image problem. Analysts
say that despite a ubiquitous presence in the United States,
RadioShack has not done enough to transform itself into a
destination for mobile phone shoppers or to make itself
attractive to younger consumers.