RadioShack May File for Bankruptcy
RadioShack said it might have to file for bankruptcy protection, or liquidate, if it can’t find a solution to its current liquidity problems.
RadioShack said in a 10-Q filing dated September 11, 2014, “Given our negative cash flows from operations and in order to meet our expected cash needs for the next twelve months and over the longer term, we will be required to obtain additional liquidity sources, consolidate our store base and possibly restructure our debt and other obligations. We are exploring alternatives and are engaged in discussions with third parties as well as our key financial stakeholders, including our existing lenders, bondholders, shareholders and landlords, in an effort to create a long-term solution. Alternatives include the sale of the company, partnership through a recapitalization and investment agreement, as well as both in and out-of-court restructuring. We presently anticipate announcing a recapitalization alternative, in the near term, which may be our most likely course of action, but we are continuing to evaluate all of our alternatives to restructure existing debt terms and other arrangements to provide additional liquidity. There can be no assurance that we will be able to successfully implement a long-term solution.”
RadioShack attempted a restructuring effort for the last 18 months, though its ability to close stores has been limited by its lenders agreement.
On Thursday, RadioShack reported financial results for Q2, which ended Aug. 2. The company said its net revenue fell 22%, to $673.8 million, from the period a year earlier, while its losses widened to $137.4 million from $52.2 million.
To read the entire 10-Q, click here.
Previously on abfjournal: RadioShack Q2 Loss Widens on 22% Drop in Revenue, September 12, 2014