Irish jobs in jeopardy as Game moves to appoint administrators

Retailer Game conceded defeat in its survival battle today after failing to raise new funding, adding to fears that dozens of Irish jobs could be in danger.

The group, which was reportedly battling to raise £180m (€216m) this week, said it intended to appoint administrators as rescue talks have not made sufficient progress.

Game, which operates 1,300 stores worldwide, including 14 in Ireland, intends to appoint administrators in the coming days but 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, British 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.

Earlier today, Game's shares were suspended after it admitted the business has no value.

The group said in a statement: "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 £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 suffered dire trading in recent months, which has forced it to ask suppliers for more generous trading terms.

But some of them have instead stopped supplying it 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).

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 across its entire operation.