Electronics retailer RadioShack Corp filed for U.S. bankruptcy protection on Thursday and said it had a deal in place to sell as many as 2,400 stores to Sprint and an affiliate of hedge fund Standard General, its lender and largest shareholder.
RadioShack, which posted losses in 11 consecutive quarters after failing to transform itself into a destination for mobile phone buyers, said in a statement that the Standard General affiliate, called General Wireless, and Sprint will acquire between 1,500 and 2,400 of its more than 4,000 stores, creating a co-branded retail presence in up to 1,750 of them.
Sprint would effectively operate a store within a RadioShack store, selling "mobile devices across Sprint`s brand portfolio as well as RadioShack products, services and accessories," Sprint said in a statement.
RadioShack also reached a deal with liquidation firm Hilco to shutter underperforming stores. Potential buyers will be able to bid on RadioShack's assets during bankruptcy, the company said.
"These steps are the culmination of a thorough process intended to drive maximum value for our stakeholders," RadioShack Chief Executive Joe Magnacca said in the statement.
RadioShack listed $1.2 billion of assets and $1.39 billion of debts in its Chapter 11 filing in U.S. Bankruptcy Court in Delaware. It said it has an agreement with a lender group led by DW Partners for a $285 million loan to operate while in bankruptcy.
The case is In Re: RadioShack Corp, Delaware Court, District of Delaware, Case No: 15-bk-10197.
(Reporting by Ramkumar Iyer and Sruthi Ramakrishnan in Bengaluru; Editing by Saumyadeb Chakrabarty and Cynthia Osterman)