British taxpayers could end up with stake in Game Group
State-owned RBS considers rescue plan for troubled high street computer games retailer
BRITISH taxpayers could end up holding a stake in Game Group, if the 84 per cent state-owned Royal Bank of Scotland leads a planned rescue of the troubled high street computer games retailer.
The Basingstoke-based group’s shares were suspended last week when the board of directors admitted it was "unable to assess the business's financial position" and had reached the conclusion that there there was no equity value left in the group. This was despite having borrowed £60m in a bid to stay afloat.
Today, the group will go into administration under the auspices of PWC (PriceWaterhouseCoopers).
Game’s collapse has been put down to a failure to close unprofitable high street stores – it has 1,300 worldwide, including 610 in the UK – and an inability to deal with online rivals such as Amazon.
There are said to be three bids in the offing – one from the American group Gamestop, another from OpCapita, new owners of the Comet electrical stores, and one from the RBS-led consortium.
The RBS plan, according to The Sunday Times, is to roll out the existing debt of about £85m into a new "phoenix" company with a much smaller chain of stores. Job losses with be inevitable.
The Basingstoke Gazette says the group employs about 6,000 across the UK, including 330 at its Basingstoke headquarters. The night before shares were suspended last week, they had fallen in value to 2.39p from 62p a year ago.