Sears Holdings Corp. has undertaken several initiatives to reconfigure its debt but warned that it would consider other options if the efforts fell short of its needs.
The company stated that it has raised $100 million in new financing and is pursuing an additional $200 million from outside sources even as it continues cost-cutting measures. In addition, Sears Holdings noted that it has amended existing second lien notes, maturing October 15, to increase their borrowing base advance rate for inventory and defer their collateral coverage test, which would then restart in the second quarter of 2018.
Sears also pointed out that it 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.
However, the company pointed out, should its efforts to complete the proposed transactions not be fully successful, the Sears Holdings board of directors will consider all other options to maximize the value of its assets.
Comparable store sales at Sears and Kmart for the first two months of the fourth quarter of 2017 declined in the range of 16% to 17%, the company stated.
Edward Lampert, Sears Holdings chairman and CEO, said, “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 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. The financial transactions we are pursuing and incremental cost actions are designed to accelerate our return to profitability and enable Sears Holdings to increase our investment in the most promising opportunities in our enterprise, including our Shop Your Way network and our Sears Home Services business. Our leadership team is more aligned and committed to the transformation of Sears Holdings than ever before. With the support of our associates, we hope to work constructively with our investors, vendors and other constituents to facilitate the actions we are announcing today.”