Sears Holdings, the one-time giant retailer that has been teetering on the edge of bankruptcy for years now, announced this morning that, following yet another disappointing holiday season (shocking), they’ve initiated new discussions with lenders aimed at renegotiating terms on some $1 billion of “non-first lien debt.”
According to a press release from the company, the debt concessions would be accompanied by another $200 million of cost cuts.
Sears Holdings Corporation announced today it has raised $100 million in new financing and is pursuing an additional $200 million from other counterparties. In addition, Sears Holdings has amended its existing second lien notes, maturing October 15, 2018, to increase their borrowing base advance rate for inventory and defer their collateral coverage test and restart it with the second quarter of 2018, and is in discussions with certain lenders regarding additional transactions to improve the terms on potentially more than $1 billion of its non-first lien debt.
The Company also outlined incremental actions to further streamline its operations to drive profitability, including cost reductions of $200 million on an annualized basis in 2018 unrelated to store closures.
Rob Riecker, Sears Holdings’ Chief Financial Officer, said: “As previously announced, we are actively pursuing transactions to adjust our capital structure in order to generate liquidity and increase our financial flexibility. The new capital we have secured represents meaningful progress towards those objectives and demonstrates that we continue to have options to finance our business.”
