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Game Digital secures £100m financing from Elliot Associates

RBR Staff Writer Published 22 April 2016

UK-based video games retailer Game Digital has secured £100m financing from a subsidiary of US hedge fund Elliott Associates, after a review was conducted into the retailer’s troubled UK business.

Game Digital

With the asset-backed finance package, which will replace Game's existing £30m bank loans, the company will be able to buy more products from its suppliers to meet the changing requirements of customers.

Game Digital said: "Since January 2016, the group has been exploring more flexible forms of funding so as to better manage its financing requirements. Specifically, the group has been investigating asset-backed lending arrangements...as these better suit the needs of the business."

The lending arrangement changes are subject to shareholders' approval at the company's next general meeting.

The changes come at a time when Game is finding it difficult to keep pace with the fast changing spending habits in the past one year, reported The Telegraph.

"The facility agreement would ensure that the group could comfortably satisfy its forecast funding requirements in a flexible and cost effective manner," City A.M quoted Game as saying in a statement.

"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," it said.

"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," the company added.

Last month, the company reported a 32% decline in its half-yearly profits, with revenue falling by 6.3% to £549.2m.

Game chief executive officer Martyn Gibbs, in March, had said: "In January we launched a review of the UK business and are committed to rapidly implementing measures to respond to current market trends.

As well as pursuing commercial opportunities we are focussed on driving improvements in the consumer proposition and realising operational efficiencies to improve our performance."

Image: Game Digital gets funding to improve business. Photo: Courtesy of Oxiq/Wikipedia.