News on GAME’s future came earlier than expected, and sadly, things aren’t looking good.
Much like an asteroid tumbling through our galaxy on a collision course with Earth, we all knew this day way coming. Sure, we assembled the crack team of astronaut commandos and tried to nuke the space boulder in twain before it flattened us, but sometimes, when nothing seems to work, its time to just clench our teeth and prepare for the inevitable. Such is the case with GAME, the UK retailer with a recent history of pain that, at this point, doesn’t bear extensive recapping. Suffice to say, the heavily predicted doomsday has come, and the company has gone into administration.
As you can probably imagine, GAME’s board has likely been in session around the clock, as it was revealed earlier this week that a Monday shutdown was eminent if an acquisition deal wasn’t brokered. Though the company had initially clung to hope of that possibility, as of this morning, its board has announced that it sees “no equity value left in the Group,” and as such, has requested that it be delisted from the London Stock Exchange, effective immediately.
Later, the board followed the announcement of its delisting with decision to enter voluntary administration. For those of you unfamiliar with the term, though not a perfect comparison, think of it as the British version of American bankruptcy.
“Further to this morning’s announcement of the suspension of trading in shares of GAME Group plc,” an official statement reads, “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 board has therefore today filed a notice of intention to appoint an administrator.
“In the short term the Board’s intention is that the business will continue to trade and discussions with lenders and third parties will continue under the protection of the interim moratorium.”
The good news is, if there is good news, that according to the potential scenarios outlined by GAME prior to these events, a voluntary state of administration would include a plan to only close 1,000 of its stores while 300 would be rebranded and reformed as a “new company, funded by current bank lenders.” It may not be much, but could at least save a substantial number of workers from losing their jobs.
Source: MCV
Published: Mar 21, 2012 03:07 pm