Sears gets court approval for an additional $ 350 million loan

Sears got Tuesday court authorization to grant $ 350 million to a bankruptcy critical financing that will keep the 125-year-old retailer active while on vacation while trying to reorganize.

Sears has entered into an agreement with Cyrus Capital Partners for financing just prior to the opening of a hearing in the US District Court of the South District of New York regarding the debtor-operator financing arrangements of the retailer, according to a person close to the file.

The Cyrus loan replaced a similar agreement reached earlier this month with Great American Capital Partners, a financial affiliate affiliated with the Great American group's liquidation specialist, and financial services firm B. Riley Financial Inc. Cyrus proposed to better conditions at Sears.

"The terms of the deal were much less favorable than we agreed," said John Ahn, president of Great American Capital Partners.

A spokeswoman for Cyrus did not comment immediately.

A Sears spokesman declined to comment on the $ 350 million loan agreement approved by US bankruptcy judge Robert Drain at the hearing.

The loan is in addition to the $ 300 million that banks provided to Sears when it filed for bankruptcy in October, providing $ 650 million in total financing to the beleaguered retailer.

"These loans will benefit everyone," said Drain.

Hedge funds, including Cyrus, have been talking to Sears over the last few weeks about funding to keep it going during bankruptcy proceedings, according to people close to the case.

The bankruptcy of Sears was expected for years, following a long fall in sales since the 2008 financial crisis, seven consecutive years of losses and a debt of some $ 5 billion.

In an effort to avoid bankruptcy last year, Sears sold its Craftsman tool brand to power tool manufacturer Stanley Black & Decker Inc. at a price of $ 900 million.

The retailer based in Hoffman Estates, Illinois, has also signed a Kenmore appliance sales agreement on Amazon.com Inc., the e-commerce site whose growing popularity with buyers has been on the market. account of several chains of physical stores for their difficult period and their bankruptcies. .

Earlier this month, Sears obtained bankruptcy court approval to advance plans to stay in business and find a buyer, while evaluating liquidators' offers.

Some creditors have said that Sears should consider shutting down by letting the liquidators sell its assets in the same way that Sports Authority did two years ago and that Toys "R" Us did this year by closing all its US branches.

Sears has already announced its intention to close approximately 180 stores, while its president, Eddie Lampert, a billionaire who manages the ESL Investments Inc. hedge fund, plans to make an offer to keep Sears active.