(Adds background, Standard General comment)
Aug 26 RadioShack Corp's second-largest
shareholder, Standard General LP, is negotiating a rescue
package with investors to help the consumer electronics retailer
ward off bankruptcy, Bloomberg reported, citing people with
knowledge of the matter.
RadioShack shares were up 7.3 percent at 77 cents on the New
York Stock Exchange on Tuesday.
The hedge fund is also working with RadioShack's management
to help the company avoid a Chapter 11 filing, Bloomberg
Standard General is seeking to strengthen RadioShack's cash
flow by issuing debt or equity, Bloomberg said.
The hedge fund has a 7 percent stake in RadioShack.
The fund is also looking to refinance RadioShack's $250
million second-lien term loan, Bloomberg reported.
The struggling retailer reported its ninth straight
quarterly loss in June and is burning through cash as it
struggles to sustain its turnaround efforts, which have so far
failed to bear fruit.
The company, whose sales have been falling since 2010, has
been slashing prices to better compete with the likes of Best
Buy Co Inc, Amazon.com Inc and Wal-Mart Stores
Standard General has also been helping American Apparel
Inc's turnaround efforts. Its stake in the retailer
recently rose to 44 percent after American Apparel founder Dov
Charney gave his stake to the hedge fund as collateral for a
David Glazek, a partner at Standard General, declined to
comment. RadioShack was not immediately available for comment.
Up to Monday's close, the stock had fallen more than 72
percent this year.
(Reporting by Ramkumar Iyer in Bangalore; Editing by Simon