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Sears is in the process of signing an agreement with new lenders to raise bankruptcy funding to $ 300 million, from $ 300 million to $ 600 million, without the contribution of President Eddie Lampert's hedge fund, said Monday people close to the case.
The agreement, which could take place by this week, could allow distressed US retailers to keep their stocks full during the holiday season and retain sufficient support from creditors and sellers to get out of bankruptcy proceedings.
The stakes are high, knowing that Sears has until December 15 to appoint a so-called bidder who would make an initial offer, which others could later complete, for hundreds of stores that would survive under a new owner .
Sears is in the final stages of negotiations with several investment companies, including Cyrus Capital Partners LP, to receive up to $ 450 million in bankruptcy financing in exchange for significant collateral held by lending banks to the retailer, indicated these same sources.
This warranty includes store leases, the sources said. In return, banks should reduce their exposure to Sears by lending $ 150 million instead of the $ 300 million originally promised to the department store operator, sources said.
Lampert is not expected to contribute to financing after the retailer has garnered sufficient interest from other lenders, sources said. The speculative fund of Lampert, ESL Investments, had discussed for a few days the participation in the financing, added the same sources.
However, ESL remains willing to lend additional money to Sears if the company does not reach the funds it needs in final negotiations with other potential lenders, said one source.
A financing agreement is expected to be announced as early as this week, although negotiations remain fluid and an agreement is not guaranteed, sources said.
A Sears spokesperson did not immediately respond to a request for comment. A spokeswoman for Cyrus declined to comment.
Sears filed Chapter 11 bankruptcy on October 15, with the goal of closing approximately 142 of its 700 stores by the end of the year, questioning the 125-year-old retailer's future that once dominated shopping centers in the United States. the era of Internet shopping.
Sears, which employs approximately 68,000 people, is currently negotiating with ESL for a potential initial offer on financially sound stores, which sources say could keep the retailer alive, according to sources and court records.
ESL could bid on up to 500 Sears stores, about 100 more than the 400 healthier stores that Sears had initially identified during the bankruptcy filing, said one of the sources.
Sears struggled to secure additional funding beyond what the banks originally promised. This is because ESL and other potential new lenders have been reluctant to provide up to $ 300 million, which would be second in terms of repayment and would not have the collateral required to secure the loan, said the sources.
A hearing to finalize the financing of Sears' bankruptcy is scheduled for November 15, according to a court file.
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