THE crisis at Basingstoke-based GAME Group intensified this week as the company suspended its shares on the London Stock Exchange and applied to go into voluntary administration.

The video and pc games retailer had reportedly been battling to raise £180million this week but sought to go into administration as talks had not made sufficient progress.

Prior to going to court to request that an administrator is appointed, GAME had effectively admitted that the business had no value yesterday morning.

In the short term, the company and its shops will continue to trade as discussions with its banks and other potential funders continue.

GAME’s share price plummeted following concerns about the company’s credit worthiness, with some major video game suppliers refusing to do business with the firm.

As reported in last Thursday’s Gazette, the company, which employs 330 people at its Telford Road headquarters and distribution centre and a further 21 at its GAME and Gamestation stores in Festival Place, has also been hit by stiff competition from online retailers.

In total, GAME employs about 6,000 people across the UK.

In a statement issued early on Wednesday, GAME’s board of directors said the value of the company had been eroded, and they had made the ||decision to suspend the shares and apply for administration following talks with its lenders and a potential third party provider of finance.

The statement said: “The board now considers itself to be unable to assess the business’s financial position, and is of the opinion that there is no equity value left in the group.

“Therefore, the company has requested that the listing of its securities on the Main Market of London Stock Exchange plc be suspended from trading with effect from 7.30am today.”

Shares in GAME closed at 2.39p on Tuesday, having fallen from 62p a year ago.

It is understood that one of GAME’s main lenders, Royal Bank of Scotland, objected to the terms of a rescue deal with private equity firm OpCapita, which recently acquired electrical retailer Comet.

It has also been reported that GAME faces a £21m rent payment due this Sunday plus a £12m wage bill at the end of the month, on top of owing more than £10m in VAT and £40m to suppliers.

It is thought that a new investor would have to pay up to £100m to GAME’s banks.