Sources are telling the Wall Street Journal and Bloomberg that financially embattled electronics retailer RadioShack is getting a lifeline in the form of financing arranged by hedge fund Standard General.

The transaction, which could happen as early as Friday, would not only bolster’s RadioShack’s liquidity by at least $120 million, it could also replace the $585 million financing arranged last year by GE Capital.

Last month, RadioShack said it was experiencing severe problems with liquidity and needed help if it wanted to stay in business and avoid bankruptcy.

Standard General’s funding could “close that gap by giving the company the ability to tap more of its credit line,” says WSJ. According to a filing last week, Standard General revealed that the funding might pave the way for a more extensive recapitalization of RadioShack that could close early next year. Standard General owns a 9.8% stake in RadioShack.

RadioShack’s other creditors, which include Salus Capital, are opposing the deal because they feel it would delay an inevitable restructuring of the company, sources tell WSJ.

Source: WSJ RadioShack Agrees to Financing Plan With Hedge Fund Standard General

Image: Coolcaesar, Wikimedia Commons, CC BY-SA 3.0

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