NEW YORK (Bloomberg) - RadioShack is closing in on an agreement with creditors and other parties that would put the retailer in bankruptcy as soon as Wednesday night or Thursday morning, people with knowledge of the discussions said.
As part of the deal being completed, RadioShack would sell leases on as many as 2,000 stores to Sprint Corp. and Standard General, its largest shareholder, according to the people, who asked not to be identified because the talks are private.
RadioShack has more than 4,000 U.S. locations, and the rest are expected to be closed, the people said. The filing could be delayed as the parties hammer out final details.
The bankruptcy would cap an almost-century-old history of selling gadgets and gizmos to America. The chain traces its roots to 1921, when it began as a mail-order retailer for amateur ham-radio operators and maritime communications officers in Boston. It eventually built a niche as a place for hard-to-find electronics and other technology. In more recent years, though, competition from Wal-Mart Stores Inc. and Amazon.com Inc. picked off customers.
A group of hedge funds and other lenders that were part of US$535 million of rescue financing arranged by Standard General in October have agreed to lend the company more money to operate in bankruptcy, the people said. The debt will refinance the balance of the group's loan, while giving RadioShack less than $50 million of new money, they said.
The bankruptcy deal doesn't preclude other bidders from taking over some of the store leases. Amazon.com has held discussions about acquiring RadioShack locations as part of a push into traditional retail, people familiar with the matter said this week.