The time for retail nostalgia is over. Now, for Sears, comes the bankruptcy process — and as reported on Monday (Nov. 5), the chain, according to Reuters, “is nearing a deal with new lenders to increase a bankruptcy financing package to as much as $600 million, from $300 million, without Chairman Eddie Lampert’s hedge fund contributing.”
The deal could come this week, the report said. It could provide enough funding for the retailer “to keep its shelves stocked during the holiday shopping season and retain sufficient support from creditors and vendors to emerge from bankruptcy proceedings,” Reuters said.
On Dec. 15, Sears faces a deadline to designed a stalking-horse bidder “that would make an initial offer, which others could later top, for hundreds of stores that would survive under a new owner.” Sears is talking with investment firms to gain $450 million in “bankruptcy financing in exchange for key collateral,” the report said.
Store leases are among that collateral.
“Lampert is not expected to contribute to the financing after the retailer garnered adequate interest from other lenders,” the report said. “Lampert’s hedge fund, ESL Investments Inc., had been in discussions in recent days about participating in the financing,” the sources added.
Sears filed for Chapter 11 bankruptcy on Oct. 15, gearing up to close 142 stores after decades of declining revenue and hundreds of store closures. In that filing, Sears listed $6.9 billion in assets and $11.3 billion in liabilities. The bankruptcy filing is the culmination of years of effort on the part of Sears and Lampert to turn the company around.
At the time, Sears said it had a $300 million financing package to fund its operations during the bankruptcy proceedings and was negotiating an additional $300 million.