Game to appoint administrators

Retailer Game conceded defeat in its survival battle yesterday after failing to raise new funding, jeopardising 125 jobs in Ireland.

The group, which was reportedly battling to raise €216m this week, said it intended to appoint administrators in the coming days as rescue talks have not made sufficient progress.

Game operates 13 stores in Ireland and 600 stores in Britain. 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.

Yesterday, Game’s shares were suspended in early trading after it admitted the business has no value.

In a statement, the group said: “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.’

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 €25m rent payment due on Sunday and a €14m wage bill at the end of the month, and owes more than €12m in VAT and €48m to suppliers. A new investor would have to pay up to €120m to Game’s banks.

Game has suffered dire trading in recent months, which has forced it to ask suppliers for more generous trading terms.

It agreed fresh lending facilities with banks last month and began seeking access to alternative sources of funding. It has already signalled losses for the year to the end of January are likely to be around £18m (€21.6m)

Pre-pack administration deals are controversial because they allow parts or all of the business to be sold but its debts to be written off, meaning creditors lose most of their money.

But administrators say the deals allow profitable parts of companies to survive and jobs to be saved. The group employs 10,000 staff.