Fears for the future of retailer Game intensified today after its shares were suspended and it admitted the business has no value.
The company, which operates 1,300 stores worldwide, including Ireland, and employs 10,000 staff, was reported to be trying to raise £180m (€216m) this week or face administration after several suppliers refused to provide it with new products.
It today said discussions were ongoing with a potential third party funder but it was unable to assess its financial position and was “of the opinion that there is no equity value left in the group”.
Its shares were suspended on the London Stock Exchange “pending clarification of the company’s financial position”.
All the group's stores, which also include the Gamestation brand, are still open for business.
It is understood that one of Game’s main lenders, taxpayer-backed Royal Bank of Scotland, has objected to the terms of a rescue deal with private equity firm OpCapita, which recently bought electrical goods retailer Comet.
It has been reported that Game faces a £21m (€25.2m) rent payment due on Sunday and a £12m (€14.4m) wage bill at the end of the month, and owes more than £10m (€12m) in VAT and £40m (€48m) to suppliers. A new investor would have to pay up to £100m (€120m) 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 trading terms.
Some of them have instead stopped supplying Game with new releases, such as 'Mass Effect 3' and 'Street Fighter X Tekken', leaving fans disappointed and adding to the group’s trading woes.
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 are likely to be around £18m (€21.6m).