Circuit City in ‘talks’ with two parties

Ailing consumer electronics retailer Circuit City has provided an update on developments in its United States Bankruptcy Court proceedings, its restructuring activities and its operations. On 5 January 2009, the company filed a motion with the Bankruptcy Court that seeks approval of procedures that would formally put the company up for sale, as a going concern, as separate business units or as individual assets - including the sale of inventory. Presently, the company is engaged in significant discussions, meetings and negotiations with two interested parties concerning the terms of a going concern transaction. These interested parties are considering providing additional financing to allow the company to sustain operations and move forward with a subsequent restructuring through a stand-alone plan and/or purchasing the company or all or substantially all of the company's assets. The parties have substantially completed due diligence and now are in negotiations with the company and the company's major stakeholders in order to finalise such a transaction.

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