GAME administration bail-out tipped as banks wade in

Chris Davies - Mar 29, 2012
GAME administration bail-out tipped as banks wade in

Beleaguered gaming retailer GAME will face a speedy exit from administration, it’s reported, with leaks tipping an RBS-led deal that could yank the ailing chain from the financial precipice as early as March 30. A Royal Bank of Scotland consortium is wading in, MCV‘s sources tell them, with the bank already being one of GAME’s main lenders and currently owed around £45m ($72m) by the retailer.

A Guardian report earlier this month indicated that GAME had shunned an earlier deal from a rival company, OpCapita, the private equity firm that currently owns European electricals retailer Comet. OpCapita supposedly offered to take over the debt and settle supplier bills; however, RBS and the other lenders involved weren’t apparently convinced.

According to that report, Nintendo, Sony and others abandoned GAME after the retailer insisted on significant discounts from suppliers. The feeling was, insiders claimed, that other retailers would give them better deals, and so the big names in gaming thought the calculated risk of walking away from one of the remaining high-street home gaming vendors in the UK was worth it.

The RBS-led deal will see the bank – which is mainly owned by the UK taxpayer, after a government bail-out several years ago – retain control of GAME, though the retailer is considerably trimmed after rouhgly 40-percent redundancies and 277 stores closing. Whether the injection of capital and inevitable restructuring is sufficient to renew the store’s appeal amid the rise of online shopping remains to be seen.

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