Fears for 6,000 UK jobs as troubled retailer's shares are suspended and it admits its business is worthless.
The future of Game Group is hanging by a thread as it said it would appoint administrators and admitted the business was worthless. The troubled retailer remains in last-minute rescue discussions with a potential investor, and its shops are still open.
The video game company, which runs 1,200 shops worldwide and employs 10,000 people, is desperately trying to raise £180m this week to stave off collapse. Sales have been hit after several suppliers refused to deliver new games, including Mass Effect 3, Mario Party 9 and Street Fighter X Tekken.
Some 600 stores are in the UK, employing 6,000 people. Game admitted on Wednesday that the business had "no equity value" when its shares were suspended from stock exchange trading.
A spokesman said the group's notice of intention to appoint administrators, thought to be PricewaterhouseCoopers, would give them a few days before an administrator walks in. Usually an administrator is appointed after five days of a notice being filed.
Game is trying to negotiate a rescue deal acceptable to its lenders with private equity firm OpCapita, which recently bought electrical goods retailer Comet. One of Game's main lenders, taxpayer-backed Royal Bank of Scotland, objected to the terms of a proposal put forward by OpCapita last week.
It is a desperate race against time, as Game faces a £21m rent payment on Sunday and a £12m wage bill at the end of the month. It also owes more than £10m in VAT and £40m to suppliers. A new investor would also have to pay up to £100m to Game's banks.
Game has borne the brunt of dire trading in recent months, which has forced the chain to ask its suppliers for more generous terms.
Game agreed fresh lending facilities with banks last month and began seeking access to alternative sources of funding earlier this month. It has already signalled that losses for the year to the end of January were likely to be around £18m.
Article Courtesy of The Guardian