Wednesday Mar 21, 201206:23 PM GMT
British retailer Game to axe 6,000 jobs
Wed Mar 21, 2012 6:22PM
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British retailer group Game has conceded defeat in its survival battle after failing to raise new funding, putting some 6,000 jobs at risk in the UK, a new report said.


The group, which was reportedly battling to raise £180 million this week, said it intended to appoint administrators as rescue talks have not made sufficient progress.

Game, which operates 600 stores in the UK and 1,300 worldwide, intends to appoint administrators in the coming days but in the short term it will continue to trade as discussions with its banks and other potential funders continue.

This will fuel expectations that it will attempt a pre-pack administration deal involving the sale of some of its estate.

It is understood that one of Game's main lenders, taxpayer-backed Royal Bank of Scotland, objected to the terms of a rescue deal with private equity firm OpCapita, which recently bought electrical goods retailer Comet.

Earlier, Game's shares were suspended after it admitted the business has no value.

"The board has concluded that its discussions with all stakeholders and other parties have not made sufficient progress in the time available to offer a realistic prospect for a solvent solution for the business", said the group in a statement.

The notice to appoint administrators will buy it time to continue discussions with potential funders and stop creditors forcing it under.

It has been reported that Game faces a £21 million rent payment due on Sunday and a £12 million wage bill at the end of the month, and owes more than £10 million in VAT and £40 million to suppliers. A new investor would have to pay up to £100 million to Game's banks.

Game has suffered dire trading in recent months, which has forced it to ask suppliers for more generous trading terms. But some of them have instead stopped supplying it with new releases, such as Mass Effect 3 and Street Fighter X Tekken, leaving fans disappointed and adding to the group's trading woes.

MOL/HE
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