Struggling computer games retailer Game Digital has agreed a new financing facility to give it breathing room while the business gets back on track.
The group has agreed an asset-backed revolving loan facility of up to £100m with Lajedosa Investments, which is described as "an entity associated with Duodi Investments" - the major shareholder of Game, which is wholly-owned by Elliot International and Elliot Associates.
If agreed, the new arrangements would replace Game's existing £30m revolving credit facility with HSBC and Barclays and would be used by Game to finance the acquisition of products from its suppliers.
Game has been exploring "more flexible forms of funding" since January 2016, specifically asset-backed lending arrangements to replace the group's existing revolving credit facilities, which it says suits the seasonal nature of its buying and trading.
"The facility agreement would ensure that the group could comfortably satisfy its forecast funding requirements in a flexible and cost effective manner," Game said this morning. "The company's directors believe that the approval of the facility agreement should support the continuation of existing credit insurance arrangements and should help insurers provide additional cover to the group's suppliers ahead of its peak trading season.
"The group continues to explore complementary or alternative similar financing arrangements from other third party providers which may be appropriate for the group to improve its options and flexibility."
Shareholders will be called upon to vote on the agreement at a general meeting, which will be held shortly.