On Monday, shares of department store Sears Holdings Corp. are gaining, up around 7.3% in midday trading after it was revealed that the company has received a new line of credit.
According to a filing with the Securities and Exchange Commission, the credit line is from CEO Eddie Lampert’s hedge fund ESL Partners, and is valued at $200 million. Sears said it has entered into a “short-term line of credit loans” with ESL; the loans have a maturity of 151 days and a fixed interest rate if 9.75% per year.
“This facility is intended to provide the Company with the flexibility to generate additional liquidity on an as-needed basis," Sears CFO Rob Riecker said in a statement. “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.”
Sears has taken many concentrated steps over the past year or so to improve business at both Sears and Kmart stores. Earlier this month, the retailer said it was continuing its “transformation” and focus on “returning to profitability” by closing another 43 locations.
Sears, however, has been one of the hardest hit department stores lately, with bankruptcy fears dogging the company at every turn—especially as the retail industry deals with the rise of online shopping and changing customer attitudes. Other department store peers like Macy’s (M - Free Report) , Kohl’s (KSS - Free Report) , and JCPenney (JCP - Free Report) have struggled as well, with investors wondering if they’ll be able to survive as e-commerce players like Amazon (AMZN - Free Report) continue to expand.
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