Standard General In Discussions To Finance RadioShack; Shares Surge 25%

(RTTNews) - Shares of RadioShack Corp. (RSH) surged about 25 percent on Friday after hedge fund Standard General LP revealed it is in discussions to improve the liquidity of the struggling electronics retailer before the holiday shopping season.

Standard General, in a SEC filing, said the proposals under discussion include purchasing loans and other commitments under RadioShack's asset backed credit facility from its existing lenders.

Standard General said the investment by the new investors could be the first step of a broader recapitalization of RadioShack that is expected to be completed by early 2015. The fund said the proposals include Standard General and certain other new investors acquiring preferred stock that could be converted into common stock, board nomination rights and changes to the company's structure

Nevertheless, Standard General, the largest shareholder of RadioShack with 9.8 percent stake, gave no assurances that the proposed transaction will occur.

RadioShack, the Fort Worth, Texas-based electronics retail chain, has been trying hard to avoid a bankruptcy filing after running out of cash supply. The company is striving to strengthen its balance sheet, cash supply and re-invent itself to avoid filing for bankruptcy.

RSH is currently trading at $0.99, up $0.1945 or 24.45%, on the NYSE.