Game chief executive Martyn Gibbs has defended its owner, former Comet backer, OpCapita, and has said it is performing well despite it operating without credit insurance.
Gibbs told The Sunday Telegraph that Game, which was acquired out of administration by OpCapita in April, is in “good shape” despite it operating on a similar basis to how Comet did before it collapsed into administration last week.
OpCapita is under scrutiny after it emerged it stands to make a profit from Comet despite it collapsing less than a year after the private investment firm acquired it for £2.
Gibbs told the newspaper that Game is forecast to make £20m EBITDA in its year to July 2013.
He said: “I have all the cash I need to trade through peak [period]. There has been nothing that I tabled that I didn’t get investment for. I can’t ask for more.”
He added that OpCapita had invested “significant millions” into Game and that any interest payments to the firm were “not at all” impeding the business.
In a similar structure to Comet, Game has £106m of loans held in “payment in kind” (PIK) notes. Interest on PIK notes is normally 9%.
Gibbs said the Game had maintained its 35% market share despite shuttering half its stores following its administration earlier this year.
He insisted that its suppliers continue to support the retailer but conceded that he would prefer to operate with credit insurance.
A lack of credit insurance is one of the main reasons why Comet collapsed according to OpCapita.
Much like with Comet, OpCapita has structured its investment so Game is charged interest on its funding and the private investment firm will be a leading secured creditor if it hits the buffers.
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