GAME GROUP, the UK’s biggest independent video-games retailer, rose as much as 48 per cent in London trading after reaching a deal with lenders to stay in business and forecasting a smaller than estimated annual loss.

Banks led by Royal Bank of Scotland have agreed to a revision of lending provisions that will allow the company to continue operating, said Game Group.

Under the amended terms, the company will “operate within lower limits of its existing facilities than was previously available”, according to Game Group, which had net debt of £91 million at the end of last July. The shares, which reached a record of 300p in May 2008, were up 24 per cent at 6.61p in London yesterday morning. They fell to the lowest since 1989 last month after the firm reported a slump in holiday sales and said it may not meet some covenants.

“We’re pleased to reach agreement with our lenders, but should be under no illusions about . . . the hard work required to deliver our strategic plan,” said chief executive Ian Shepher.

Game Group said its pretax loss for the year ended January 31st was about £18 million, excluding non-recurring item. – (Bloomberg)