Game Group is teetering on the brink of administration, putting 10,000 jobs at risk, after the troubled computer games retailer admitted that its shares could be worthless.
The group, which has nearly 1,300 stores globally, is locked in crisis negotiations with its banks and suppliers ahead of a massive, second-quarter rental payment which is due on 25 March in the UK.
Its most serious problem relates to three big suppliers, Electronic Arts, Capcom and Nintendo, who are withholding their latest products from Game amid grave concerns about the group's credit worthiness.
Game, which has 6,000 staff in the UK and 4,000 overseas, has suffered disastrous sales in recent months and made an estimated loss of £18m for the year to 31 January. If the group collapsed, it would be the biggest administration of a UK-listed retailer since Woolworths in November 2008.
Game, which has 610 UK stores, is examining all options with lenders and suppliers to safeguard its future.
But the company said: "It is uncertain whether any of the solutions currently being explored by the board will be successful or will result in any value being attributed to the shares of the company."
Game said while discussions with suppliers are ongoing, "it has not been possible to source new products from a number of suppliers".
Shares in the group collapsed 64 per cent, or 2.23p, to 1.28p yesterday, valuing the company at just £4.4m. They were as high as 62p a year ago.
Peter Smedley, at Charles Stanley, said: "Imminent collapse into administration is now a real possibility."
A restructuring team from Deloitte has been advising Game since December, and the accountancy firm is understood to have been lined up as administrator if a rescue deal cannot be agreed.
Game hired advisers at Rothschild in January to sell its international operation of 663 stores, but the remit of the bank has now been widened to seek a buyer for all the group's assets in the UK and overseas.
The world's largest video games retailer, GameStop, has expressed an interest in Game's 291-store operation in Spain and Portugal.
The games giant is also thought to be considering bids for other countries where it is not the market leader, such as the UK. But a rescue deal for Game's domestic operation could see it offloading as many as 300 stores in the UK.
Like-for-like sales at Game in the UK and Ireland plummeted by 15.2 per cent for the eight weeks to 7 January and it warned on profits twice between November and the start of this year.
The accountancy firm PwC is advising Game's syndicate of six banks: RBS, Barclays, HSBC, Allied Irish Banks and Bank of Ireland, as well as the Spanish lender La Caixa.