Struggling U.S. retailer Sears (NASDAQ:SHLD), on Wednesday announced a bunch of new financial maneuvers, roughly a month after the company bought itself more time by extending its debt while announcing that it was pursuing new financing.
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While Sears’ struggles have been apparent for years with the company aggressively downsizing, this time, the language in the company’s press release discussing the company’s next financial steps suggests that the retailer may soon be out of runway.
The company on Wednesday said it raised $100 million in new financing, is pursuing an additional $200 million, is amending its existing lien notes, and is pursuing additional credit while seeking to improve the terms on more than $1 billion in its non-first lien debt.
Sears is continuing to pursue a secured credit facility, consisting of an approximately $407 million first lien tranche and a second lien tranche of up to $200 million, secured by the 138 properties currently subject to a ring-fence arrangement with the Pension Benefit Guaranty Corporation. The 138 properties have an aggregate appraised value of approximately $985 million.
In discussing the financial adjustments that the company is pursuing, and therefore are not guaranteed, Sears noted that, if its efforts to complete these transactions are not fully successful, the board will “consider all other options to maximize the value of its assets.”
"We made significant progress in 2017 through our efforts to reset our cost base and enhance our liquidity, as well as our recently announced agreement with the PBGC to pre-fund our contributions to our pension plan for the next two years. The initiatives we have announced today build on those achievements and make clear our determination to remain a viable competitor in the challenging retail environment,” Sears Chairman and CEO Eddie Lampert said in a statement.