Game Group, the UK-based video games retail chain will become the biggest casualty on High Street after it announced yesterday that it plans to enter into administration, the biggest chain to potentially go under after British retailer Woolworths in 2008.
Shares of the Basingstoke, Hampshire-based company were yesterday suspended from trading after the value of its shares had been eroded. It said that its talks with stakeholders and others parties had not made enough progress to offer "a realistic prospect for a solvent solution.''
Shares in Game closed at 2.39 pence on 19 March, having fallen from 62 pence a year ago.
''Further to this morning's announcement of the suspension of trading in shares of GAME Group plc, the board has concluded that its discussions with all stakeholders and other parties have not made sufficient progress in the time available to offer a realistic prospect for a solvent solution for the business. The board has therefore today filed a notice of intention to appoint an administrator,'' said the company in a news release.
''In the short term the Board's intention is that the business will continue to trade and discussions with lenders and third parties will continue under the protection of the interim moratorium."
By asking for a voluntary administration, Game will create a 10-day moratorium, which will protect it from creditors without formally going into administration.
Going into administration in the UK is akin to filing for bankruptcy protection in the US. Administrators try to salvage as much of the company as possible for the benefit of its creditors. Administrators can try to keep the business as a going concern or break it up and sell it off.