Sears Holdings is getting a $200 million line of credit from the hedge fund run by the retailer’s CEO, Edward Lampert.
In a Securities and Exchange Commission filing on Thursday, July 13, Sears Holdings said that it has entered into a short-term line of credit loans with ESL Lenders. The loans have a maturity of 151 days and have a fixed interest rate of 9.75% per year.
Rob Riecker, Sears Holdings CFO, told CNBC that the credit facility is intended to provide the company with the flexibility to generate additional liquidity on an as-needed basis.
“This adjustment to our capital structure demonstrates that Sears Holdings will continue to take actions to generate liquidity and manage our business while meeting all of our financial obligations,” he said.
Over the past year, Sears Holdings has taken numerous steps to improve both its struggling Sears and Kmart stores. Most recently in early July, the company said it was continuing its “transformation” and announced the closing of another 43 locations across both retail brands.