Troubled high-street retailer GAME Group, which recently announced plans to appoint an administrator as time ran out on its mounting debts, could get a last-minute reprieve thanks to a group of bidders interested in acquiring the company.
GAME Group, which runs the high-street brands Gamestation and GAME, has been in trouble for months. A slow Christmas period meant financial troubles, and its problems have mounted since with publisher after publisher refusing to provide new-release titles for sale.
Things are about to come to a head, however. The company is thought to have but days left to make repayments to its lenders and simultaneously meet the rent on its high-street properties - and it simply doesn't have the money to make that happen.
Accordingly, the GAME Group board suspended its shares on the London Stock Exchange
last week, stating that it saw 'no equity value left in the company.
' This announcement was swiftly followed by the news that the company is heading into involuntary administration.
Should GAME Group enter into administration, it would be dark times for its staff. With so many debts to its name, an administrator would likely force a stock sell-off followed by closure of its retail stores in order to satisfy debts. The best GAME Group could hope for would be the continuation of one of its web-based retail arms.
There is a glimmer of hope on the horizon, however: the Telegraph
and the Sunday Times
both report that a consortium of investors led by banking giant RBS is planning to sink some cash into the beleaguered company in the hopes of saving it from the scrapheap.
RBS has a good reason to try to save the company: along with six other lenders, it's one of the banks to which GAME Group owes an estimated £100 million - money the bank probably wouldn't see should the administrators be called in.
The deal isn't guaranteed, however. Sources speaking to Sky News
claim that investment will not be forthcoming before administrators are appointed later today, with RBS looking to purchase a 'slimmed-down version of the group
' from the administrator. If true, that spells dark times ahead for the company's employees.
Administrators have been appointed, spelling the end of the GAME Group as we now know it. 'Further to our announcements of 21 March, the Board of GAME has completed its discussions with lenders and third parties without resolution, and has therefore today appointed PWC [PriceWaterhouseCoopers] LLP to act as administrators for the Group
,' the company has confirmed in a statement to press. 'This decision is taken after careful consideration and ceaseless interrogation of every possible alternative. The Board would like to thank the teams of GAME and Gamestation colleagues around the world for their exemplary dedication, passion and professionalism.