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The Game Group operates retail outlets that specialize in the retailing of computer software, video games and related products.
Game Group gets breathing space despite £18 million lossFebruary 03 2012, 9:17am
Shares in beleaguered computer games retail Game (LON:GMG) jumped by a third as its lenders agreed to revise its borrowing facilities.
Game said the revised terms mean it will operate at a lower borrowing level than previously but the new terms will allow it to continue to trade.
The group added it now expects a loss before tax and non-recurring items of £18m for the year to 31 January 2012 but it would not now breach its loan covenants.
Game warned three weeks ago it was in danger of breaching its EBITDA test after a slump in trading over Christmas.
But after receiving support from its stakeholders and lenders, the retailer said it will meet its covenant tests for the period to 31 January 2012 when they are tested on 27 February.
The new loan terms included an updated strategic plan which will be reviewed and approved by the lenders.
“This plan will cover all aspects of the business's activities and strategy, including its overseas operations, Game said.
Ian Shepherd, Game’s chief executive, added: "We're pleased to reach agreement with our lenders, but should be under no illusions about the challenges in our market or the hard work that is required to deliver our strategic plan."
Game has been battered by a widespread slump in the computer games market, which has suffered due to general economic conditions and a shift by people to downloading games or playing online.
The group has already started on a store closure programme and is expanding its digital sales operation.
Shares rose 1.6p to 7p.