Salus offers RadioShack $500M in financing: Report

Radio Shack
Adam Jeffery | CNBC

Salus Capital has offered Radioshack $500 million in turnaround financing to fund the electronics retailer's operations if it files for bankruptcy, Dow Jones Reported Monday, citing sources close to the matter.

The loan would increase Salus' influence in the embattled company's affairs, the report said.

The consumer electronic provider's shares were last up about 5 percent in after-hours trading.

Radioshack has not disclosed plans to file for Chapter 11, but it has handed in net losses for 11 straight quarters.

Salus's debtor-in-possession loan expires Thursday, according to the Dow Jones report.

Last year, the Texas-based company said it could be forced to seek bankruptcy protection if it failed to raise new capital or get relief from lenders.

In addition to its previous turnaround efforts, RadioShack attempted to close 1,100 stores last year to focus on more profitable locations, but the move was blocked by its term lenders, the company said.

Salus Capital accused RadioShack of breaching covenants on a $250 million term loan in December. The electronic retailer said it would fight the claims, calling them "wrong and self-serving."

RadioShack declined to comment on the matter.