Report: Sears Borrows $150M From Lenders Including Ex-CEO Amid Bankruptcy Troubles
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Sears’ ex-CEO has reportedly joined lenders in helping bankroll the struggling retailer.
According to Reuters, which cited people familiar with the matter, Eddie Lampert, as well as hedge fund Cyrus Capital Partners LP, were said to be among the lenders to provide roughly $150 million in new financing that will go toward stocking shelves at the chain’s stores for the crucial holiday shopping season.
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The Reuters report added that the funding was aided by assets that included Sears’ real estate and intellectual property, but was less than the $200 million that the company had sought in negotiations with lenders. FN has reached out to Sears for comment.
The news comes a year after Sears’ parent company filed for Chapter 11 bankruptcy protection after failing to turn a profit since 2010. It joined a list of other high-profile retail victims including Toys ‘R’ Us and Bon-Ton, as brick-and-mortar mainstays shrink their physical footprints and invest more resources in e-commerce.
Through namesake hedge fund ESL Investments Inc., Lampert has extended $2.4 billion in various secured financings to Sears Holdings Corp. over the years. “These financings and other transactions involving Sears’ assets were undertaken to facilitate the company’s continued operations and implement its transformation plan,” the firm previously wrote to FN.
The billionaire executive — who took control of the company in 2005 — won a bankruptcy auction early this year, striking a $5.2 billion deal in February that rescued the Illinois-based retailer from liquidation, saving 425 stores and 45,000 jobs. Transform Holdco LLC, the firm owned by Lampert’s hedge fund, now owns the business and operations of Sears and Kmart.
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