Report: Lender drops out of negotiations with RadioShack

A potential lender to RadioShack Corp. has dropped out of negations with the company to take over a $140 million loan, according to a Bloomberg report, citing people with knowledge of the negotiations. Monarch Alternative Capital LP, run by Michael Weinstock, was leading talks with two other hedge funds to acquire the asset-backed senior loan and renegotiate the terms, according to the report. RadioShack is seeking to refinance the debt with better terms, according to the report, giving the Fort Worth-based company time to implement a turnaround plan. In a filing in September, RadioShack said refinancing its debt was key to avoid a cash crunch and possibility to bankruptcy by the Fort Worth-based electronics retailer.

In October, RadioShack, agreed with a group led by Standard General to refinance a $535 million credit facility to help it restock inventory before the holidays. Standard General, a New York-based hedge fund, led a group of lenders that acquired the asset-backed revolving credit line from General Electric’s lending arm and agreed to loosen its borrowing terms. Standard General and Litespeed Management also agreed to provide $120 million to cash collateralize letters of credit for the company. The retailer said it expects those funds to be converted into equity later. – Robert Francis, rfrancis@bizpress.net This report contains material from Bloomberg.