Standard General LP Steps In To Save RadioShack Corporation (NYSE:RSH) From Bankruptcy Filing

Hedge Fund Standard General LP is seeking to sell a part of its stake in RadioShack Corporation (NYSE:RSH) in exchange for seats in the company’s board.

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Largest Shareholder

As the Wall Street Journal article highlights, Standard General LP said that it is willing to sell off some of the RadioShack shares it holds. The hedge fund agreed to trade its stake with four seats in the company’s board. According to analysts, this could help RadioShack hold back a bankruptcy filing. This is because Standard General is the company’s largest shareholder. It owns 9.8% of RadioShack Corporation (NYSE:RSH)’s shares, which is currently struggling in the electronics industry. Standard General’s share stake amounts to a total of 10.1 million shares. The highlighted figure is as recorded in one of the hedge fund’s regulatory filing.

About The Deal

According to a recently amended refinancing deal, the hedge fund’s General Retail Holdings LP has agreed to offer 10% of its preferred stockholdings. The announcement, which was announced on Wednesday, underlined that General Retail Holdings LP demanded four seats in the company’s board in exchange for its stake sell-off. The hedge fund said that of the four board seats, at least two should be independent directors. The deal was filed with the Securities and Exchange Commission and was announced on Wednesday.

Post the execution of the deal RadioShack Corporation (NYSE:RSH)’s board would comprise its Chief Executive Officer, two independent directors, and the four designees.

RadioShack Corporation (NYSE:RSH) had made an announcement in September, which highlighted the endeavors that the company was taking to secure its financial position. The electronics chain had said that it was working to resolve the financial issues and was in talks with several investors. In addition, it had also warned about the fact that it feared a potential bankruptcy filing. RadioShack Corporation (NYSE:RSH) had taken many measures in this direction and had previously closed down as many as 1,100 stores in the U.S.

About the Author

Adam is a staff reporter for US Markets Daily Publications & Media, covering foreign affairs and domestic policy.

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