FORT WORTH, Texas, Dec. 10, 2013 /PRNewswire/ -- RadioShack Corporation (NYSE: RSH) announced today that it has completed a new financing totaling $835 million including a $585 million senior secured ABL credit facility led by GE Capital, Corporate Retail Finance and a $250 million secured term loan led by Salus Capital Partners, LLC. This comprehensive new financing will be used to refinance existing debt and provide approximately $200 million of incremental liquidity, all of which will further strengthen the Company's balance sheet as it continues to move forward with its operational turnaround.
Joseph C. Magnacca, chief executive officer, said, "In July, we outlined the five pillars of our turnaround plan: reposition the brand, revamp the product assortment, reinvigorate the store experience, operational efficiency and financial flexibility. This new financing fulfills the last pillar and provides the financial flexibility and ample runway to turn this business around. We are pleased to have a consortium of leading finance companies partner with us and participate in this new financing. With our financing completed and the progress we have made recently on our other pillars, we are focused on delivering a great RadioShack experience for the millions of our customers who choose to shop with us this holiday season."
Jim Hogan, senior managing director, GE Capital, Corporate Retail Finance, said, "Our business is helping retailers with efficient capital support for their operations including retailers that are in the midst of transition. We are pleased to be the lead arranger for the new facility and support the RadioShack team as they work to successfully turn around this longstanding brand in the retail landscape."
Andrew H. Moser, President and CEO of Salus Capital said, "As we look to partner with companies that need creative commercial financing, including capital to fund an operational turnaround driven by a new management team, we are excited to help RadioShack fuel the next stage in its development."
The new ABL credit facility was arranged and led by GE Capital, Corporate Retail Finance and has been syndicated to CIT Corporate Finance and RBS Citizens, N.A. The terms include a five-year duration, a $535 million revolving line of credit and a $50 million term loan. The term loan is a first-in-last-out term loan which was drawn and funded at closing and carries a rate of LIBOR plus 4%. This new facility is secured by the inventory and accounts receivable of the Company's U.S. operations.
The new $250 million secured term loan was led by Salus Capital. The terms of this loan include a five-year duration and a rate of LIBOR plus 11%. This term loan was drawn and funded at closing and is secured by a second lien on the assets securing the new ABL credit facility and a first lien on certain other assets of the Company.
Peter J. Solomon Company acted as financial advisor to RadioShack on the new financing.
The Company has exited the existing $450 million ABL credit facility and the two accordions totaling $75 million and has retired an existing $100 million second lien term loan. With this new financing and the existing $325 million of 6.75% unsecured notes due in 2019, the Company has approximately $625 million dollars of debt outstanding.
This press release contains forward-looking statements, as referenced in the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect management's current views and projections regarding economic conditions, the retail industry environment and Company performance. These statements can be identified by the fact that they include words like "anticipate," "believe," "estimate," "expect," "intend," "project," "guidance," "plan," "outlook" and other words with similar meaning. We specifically disclaim any duty to update any of the information set forth in this press release, including any forward-looking statements. These statements involve a number of risks and uncertainties that could cause our actual results to differ materially from the results discussed in our forward-looking statements. Factors that could cause our actual results to differ materially from the results discussed in our forward-looking statements include, but are not limited to, our ability to execute and the effectiveness of our 2013 initiatives; our ability to complete the new debt financings on the terms contemplated by the commitments in the fourth quarter of 2013 or at all; the underperformance or loss of certain of our important vendors, such as our wireless carrier providers, or breaches by them of our agreements with them; an adverse impact on our sales or profitability due to changes wireless carrier providers make to their customer credit requirements, frequency of upgrade eligibility, or other operational matters, and the timing, completeness, and accuracy of information we receive about such changes; a decline in our gross margin due to customer demand for lower margin mobile devices, such as smartphones and tablets; overall sales performance; economic conditions; product demand; expense levels; competitive activity; interest rates; changes in the Company's financial condition; availability of products and services and other risks associated with the Company's vendors and service providers; the regulatory environment; and other factors affecting the retail category in general. Additional information regarding these and other factors is included in the Company's filings with the SEC, including its most recent Annual Report on Form 10-K for the year ended Dec. 31, 2012.
ABOUT RADIOSHACK CORPORATION
RadioShack (NYSE: RSH) is a leading national retailer of innovative mobile technology products and services, as well as products related to personal and home technology and power supply needs. RadioShack® offers consumers a targeted assortment of wireless phones and other electronic products and services from leading national brands, exclusive private brands and major wireless carriers, all within a comfortable and convenient shopping environment. RadioShack employs approximately 30,000 knowledgeable and helpful sales experts globally. RadioShack's retail network includes approximately 4,300 company-operated stores in the United States, over 270 company-operated stores in Mexico, and approximately 1,000 dealer and other outlets worldwide. For more information on RadioShack Corporation, please visit www.radioshackcorporation.com; to purchase items online, please visit www.radioshack.com. RadioShack® is a registered trademark licensed by RadioShack Corporation.
SOURCE RadioShack Corporation