Game not over for computer games retailer as lifeline appears from Comet owner
15:21 GMT, 15 March 2012
Shares in struggling Game Group soared nearly 60 per cent today as hopes
mounted that it may have found a new source of funding – widely thought
to be new Comet owner OpCapita.
The video games retailer, which is trying to stave off collapse after
several suppliers refused to provide it with new products, confirmed
that 'a third party' had entered the picture and was seeking talks with
The group, which employs 10,000 people, said: 'The board of Game confirm
that a third party has shown interest in providing additional funding
for the company.
Retail woes: A number of Game Group's suppliers have refused to do business with the company
'The third party is seeking a dialogue with the group's
current lenders, however there is no certainty to the outcome.
'At the same time, the board remains in its own discussions with its current lenders as it continues to conduct a review of its business and assets.'
Private equity firm OpCapita has reportedly tabled a bid to buy out Game's lenders, including complete repayment of all the chain's suppliers.
OpCapita, a retail turnaround specialist, recently bought ailing electricals chain Comet for 2 in a deal that included ex-owner Kesa pumping 50million into the business and taking on its pension scheme liabilities.
Game's stock, which has suffered massive losses in the past week, was 1.23p higher at 3.33p in early afternoon trading today.
Earlier this week, Game said it was seeking access to alternative sources of funding and has asked suppliers for more generous trading terms, but so far it has not been possible to source new products from a number of suppliers.
Game reiterated today that it was uncertain whether its efforts would be successful or whether the company would be left with any value.
The group's quarterly rent bill is due in a fortnight and failure to pay its landlords could push it into administration.
The company's woes have worsened after it failed to stock new eagerly-awaited titles such as Mass Effect 3 and Street Fighter X Tekken.
The group agreed fresh lending facilities with banks last month but the loan was not enough to reassure suppliers, who have baulked at being asked to give the group better terms to help it stay afloat.
The company, which has 1,300 stores worldwide trading under the Game and Gamestation brands, had a difficult Christmas, with like-for-like sales down 12.9 per cent in the eight weeks to January 7, a performance blamed on a lack of new consoles and a squeeze on consumer spending.
Game has already signalled that losses for the year to the end of January are likely to be around 18million.
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