RadioShack calls claims of covenant breach ‘self serving’

RadioShack on Tuesday rejected lender Salus Capital’s claim that it breached covenants on a $250 million term loan. The electronic retailer said it plans to “vigorously contest” the allegations, calling them “wrong and self-serving.”

“We will do everything we can to assure that these claims do not distract us from our ongoing efforts to rationalize our capital structure and transform our business,” said Joe Magnacca, RadioShack CEO in a press release.

“This is particularly disturbing in light of meaningful steps we have taken in our turnaround plan, as well as the recapitalization steps announced in October.”

The claims relate to the recapitalization and investment agreement and amendment to the retailer’s credit facility that it entered into onOctober 3, the company said in a statement.

Trading in RadioShack shares were temporarily halted after the announcement. The stock was down more than 1 percent before the halt.

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