VIDEO game retailer Game has become the latest company to run into trouble on the high street after warning shareholders their investments could be worthless as it continues talks with suppliers and lenders.
As a result the company, which operates 52 stores in Scotland, saw its shares changing hands for as little as 0.5p.
Last March it was trading at around 63p, and yesterday the stock eventually closed down 2.23p or 63.5% at 1.28p, valuing the company at just £4.4 million.
Last month, Game agreed revised terms on its £160m loan facility, for which Royal Bank of Scotland is the lead banker, although Barclays, HSBC, La Caixa, Bank of Ireland and Allied Irish Banks are also involved.
However, it has been deserted by big suppliers and over the last two weeks has had to tell its customers to shop elsewhere for the biggest new releases, such as Electronic Arts' Mass Effect 3 and Capcom's Asura's Wrath and Street Fighter X Tekken.
Game said: "The group confirms that it remains in discussions with its suppliers and lenders in relation to terms of trade that allow the business to operate within the facility provided by its banking syndicate.
"While these discussions are ongoing, it has not been possible to source new products from a number of suppliers."
It said that it is in talks with existing and potential new funders and its suppliers and is also reviewing its business in the UK and overseas.
It continued: "It is uncertain whether any of the solutions currently being explored by the board will be successful or will result in any value being attributed to the shares of the company."
Peter Smedley, analyst at Charles Stanley, said: "Imminent collapse into administration is now a real possibility."
The firm has faced intense competition from internet retailers and supermarkets, which are sometimes able to offer new titles as loss leaders.
The result is that the last few years have seen its earnings dwindle from around £100m to an expected full-year loss of around £20m.
Like-for-like sales fell by 12.9% over the Christmas period.
Established in 1992 as Rhino Group, it has around 1300 stores worldwide thanks to the acquisition of rivals such as Virgin Games and Gamestation, which it snapped up in 2007 just ahead of the recession.
The most immediate challenge faced by Game is a quarterly rent bill due in two weeks.
Failure to meet that could result in the company going into administration.
The firm, which employs 6000 people in the UK, has been closing stores and moving into digital gaming, aiming to avoid the fate of other struggling entertainment retailers, such as music and films group HMV.
One potential rescuer is US rival Gamestop. However, many in the City remain sceptical that a serious bidder will emerge before the company is forced to enter administration.
The company, which has its headquarters in Basingstoke, Hampshire, has 1300 stores worldwide, including 600 in the UK, trading under the Game and Gamestation brands.
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