Sears chairman searches partner to finance debt and exit bankruptcy
Edward S. Lampert, the company’s chairman and owner of hedge fund ESL Investments, is holding discussions with one of Sear’s existing creditors, Cyrus Capital Partners, to share the burden of funding portions of the 300 million dollars bankruptcy loan the retailer is seeking.
Sears seeks new financial allies to keep the business afloat. Hedge fund ESL Investments, owned by the company’s chairman Edward S. Lampert, is holding discussions with investment firm Cyrus Capital Partners, one of the group existing debtors. The aim of the negotiations is to contribute to a 300 million dollar bankruptcy loan that the retailer is seeking since filing for Chapter 11 a week ago.
The US department store group is looking to share the burden of funding portions of the loan, which would be separate from another 300 million dollar bankruptcy loan that Sears’ banks offered to provide, according to Reuters. The company survival is hanging on the willingness of creditors and suppliers to keep the business afloat.
The evolution of sales during the upcoming holiday season will be crucial in order for the group to secure enough financing to remain operational until then. ESL Investment has invested billions of dollars in Sears since the merger of the company with Kmart in 2005, becoming the largest shareholder and creditor of the retailer.
Sears filed a voluntary Chaper 11 petition on October 15 seeking bankruptcy court protection in White Plains, New York. The petition included assets worth 6.94 billion dollars (6.02 billion euros) and total liabilities of 11.34 billion dollars (9.8 billion euros). Lampert stepped down as Sears’ chief executive officer following the bankruptcy filing. The group employs close to 70,000 people and plans to end the current fiscal year with less than 700 stores.
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