Game Group lenders 'planning buy-out bid'

Game Group lenders 'planning buy-out bid'

Lenders of stricken Game Group are working on plans to buy the slimmed-down retailer out of administration, it was reported today.

With Game’s British operations expected to go into administration on Monday, the consortium of existing banks led by state-backed Royal Bank of Scotland is among three potential bidders, the Sunday Times said.

PwC, the administrator, is likely to announce the closure of loss-making stores within the 600-strong store estate, triggering job losses among the 6,000-strong UK workforce, before selling a profitable “phoenix” company.

Bids are also expected from American rival Gamestop and OpCapita, which recently acquired Comet and has tabled one offer for Game already.

The RBS-led consortium is expected to roll the existing debt of about £85m (€101.76m) into the new company.

On Wednesday, Game said it had filed a notice of intention to appoint an administrator, having admitted there was no value left in the company and leading to the suspension of its shares.

Its demise follows a string of profit warnings and the failure of nervous suppliers, including Electronic Arts and Nintendo, to go on providing new games.

The retailer has a £21m (€25.14m) rent bill due today and a £12m (€14.37m) wage bill due the following weekend, although PwC is expected to honour any wages owed.

There is also £10m (€11.97m) in VAT and £40m (€47.88m) owed to suppliers.

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