Bloomberg: UBS Working With Standard General On Loans For RadioShack

(RTTNews) - Swiss banking giant UBS AG (UBS) is working with hedge fund Standard General LP on loans for electronics retailer RadioShack Corp. (RSH) as it tries to stave off bankruptcy, Bloomberg reported Wednesday, citing people with knowledge of the matter.

Standard General, a shareholder of RadioShack, is said to be seeking to improve RadioShack's cash position by issuing debt or equity.

According to the Bloomberg report, money raised as loans would first be used to refinance RadioShack's debt outstanding under an asset-backed revolving credit line of $535 million from GE Capital, the lending unit of diversified conglomerate General Electric Co. (GE).

The refinancing of that debt will reportedly enable RadioShack to access more cash, as its current debt agreement restricts how much money it can draw from the revolver.

However, the success of the rescue package is said to depend on whether creditors like Salus Capital Partners LLC will agree to terms that will allow RadioShack to close additional stores.

RadioShack's creditors had blocked its plan to close 1,100 stores earlier this year, forcing the company to limit the closings to about 200 stores instead. The closure of more underperforming stores would enable the company to burn less cash.

Fort Worth, Texas-based RadioShack is slated to report its financial results for the second quarter on Thursday, September 11.

In June, the company reported a wider loss for the first quarter as comparable-store sales fell 14 percent, hurt by traffic declines and soft performance in the mobility business. The loss was the company's ninth straight quarterly loss.

RSH closed Wednesday's trading at $0.93, down $0.009 or 1.00 percent on a volume of 15.44 million shares. However, in after-hours, the stock gained $0.12 or 12.78 percent to $1.05.