RadioShack Corporation (OTCMKTS:RSHCQ)’s Creditors Analysis Standard General Takeover Offer

Standard General has increased the offering price for RadioShack Corporation (OTCMKTS:RSHCQ). The purchase price is a proposal to cut down debts owned by the company rather than cash. Standard General has increased the number of outlets it intends to keep open. It wants to preserve 7,500 jobs that are on stake after the retailer filed for bankruptcy protection. It is a proposal that the company has yet to accept as it tries to garner support for a takeover from creditors and balky lenders.

The details

Going into a bankruptcy auction, Standard General enhanced its bid price for RadioShack, hoping to settle queries about the currency it is utilizing at the auction. Standard General Bid is in the form of a proposal to cancel debts rather than cash. It is the main problem as creditors of the company have challenged the validity of debts.

The struggles

RadioShack business was hurt by the aggressive competition from Cellphone carriers. There were many other industrial forces that had been adversely affecting the RadioShack’s rambling bricks-and-mortar business for years. Standard General provided its assistance in 2014 in a deal it has defended as a fair effort to provide the struggling retailer an opportunity for comeback. However, experts believe that by the time lender stepped in, RadioShack Corporation (OTCMKTS:RSHCQ) was unable to keep its shelves stocked. It was left with no borrowing power. The company filed for a bankruptcy on February 5.

The unending problems

Creditors say last year’s financial measures are a prime reason behind the company’s failure. As of now, the problems are so intense that RadioShack cannot give another month’s rent of its 2,000 stores. Standard General is expected to take on 1,743 stores. However, it said that the deal won’t be closed unless it is permitted to fund the takeover process with its loans. The arrangements are expected to materialize only if RadioShack remains in business.

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