By Dhanya Skariachan and Nick Brown
NEW YORK, Oct 21 (Reuters) - RadioShack Corp hassecured a fresh round of financing from GE Capital, two peoplefamiliar with the matter said on Monday.
The news, which was first reported by the Wall StreetJournal, boosted shares of the U.S. consumer electronics chain by 7 percent to $3.52 on Monday.
General Electric Co's GE Capital will extend $835million in new financing secured by inventory and other assets -$585 million in the form of a credit facility and $250 millionin a second-lien term loan, one of the people said.
Reuters reported earlier this month that GE Capital, whichtends to make large asset-based lending deals, was among manycompanies that made financing offers to the retailer.
RadioShack had been looking to refinance existing debt inpart to cut borrowing costs. The company's previous lenders, ledby Bank of America Corp and Wells Fargo & Co,had also made offers for new financing, but GE offered a moreattractive advance rate, one of the people said.
A spokesman for GE Capital declined to comment. Aspokeswoman for RadioShack did not return a call seekingcomment.
New capital could help assure vendors and other key partnersthat RadioShack has enough cash to fund turnaround efforts ledby Chief Executive Joe Magnacca.
Sales at RadioShack have been falling rapidly amid executivedepartures, strong competition and an image problem. Analystssay that despite a ubiquitous presence in the United States,RadioShack has not done enough to transform itself into adestination for mobile phone shoppers or to make itselfattractive to younger consumers.
- GE Capital