Electronics retailer RadioShack has filed for U.S. bankruptcy protection on Thursday and said it had striked a deal to sell 2,400 stores to an affiliate of hedge fund Standard General, its lender and largest shareholder.
General Wireless, the entity formed to acquire the stores under the asset purchase agreement, has also agreed also in principle on terms with Sprint
to establish a new dedicated mobility "store within a store" retail presence in up to 1,750 of the acquired stores.
Sprint plans to sell "mobile devices across Sprint`s brand portfolio as well as RadioShack products, services and accessories," Sprint said in its statement.
To effectuate this transaction and an orderly sale of the company’s remaining assets, RadioShack and certain of its U.S. subsidiaries have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.
The sale agreement is subject to court approval and other conditions. RadioShack’s foreign subsidiaries and its franchisee-owned stores are not included in the filing.
In addition, RadioShack has filed a motion with the Court to proceed with the closure of the remaining company-owned stores under an agreement with Hilco Merchant Resources. Stores that are closing are expected to sell remaining inventory.
RadioShack currently has approximately 4,000 company owned stores in the U.S. The company says that discussions are underway with interested parties to sell all of its remaining assets.
RadioShack's bankruptcy, which has been expected for months, follows 11 consecutive unprofitable quarters as the company has failed to transform itself into a destination for mobile phone buyers.
RadioShack said it also has an agreement with a lender group led by DW Partners for a $285 million loan to operate in bankruptcy.