The Deal's David Marcus interviews colleague Richard Collings, who reports on retail, about the recent travails of RadioShack. The troubled electronics retail chain is racing against the clock as it weighs its options, including a refinancing or a bankruptcy. It is burning through cash rapidly as it is unable to close money-losing locations. RadioShack planned to close up to 1,100 stores earlier this year, a plan that was blocked. Holding up the plan is Salus, which holds a $250 million second-lien loan. There is a covenant on that loan that requires RadioShack to get the lender's approval if it is to close more than 200 stores, but closing those stores would also mean a reduction in inventory. It is that inventory that is being used as collateral to back the loan. RadioShack hopes to get help from hedge fund Standard General, who may aid in arranging financing that might not only buy RadioShack some extra time, but also give it flexibility in closing stores.
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