Sears Seeks New Cash Via Two Paths

October 20, 2014

Sears Holdings Corp., the struggling one-time U.S. retail stalwart, unveiled two new measures today in a bid to raise cash, one of which again taps into the hedge fund of its billionaire chief executive, the Wall Street Journal reported today. The company said that it would lease seven locations to European fashion retailer Primark, while it also unveiled an offering of debt rights and warrants that could generate as much as $625 million and help fund operations during the holiday-shopping season. Sears said that the hedge fund, run by CEO Edward Lampert, has said that it intends to exercise its portion of the subscription rights in the offering in full, which would result in at least $303 million.

Retailer Alco Stores Secures Interim Loan Approval

October 20, 2014

Alco Stores Inc., a 198-store retailer largely serving small towns in 23 states, can finance the reorganization it began last week in Dallas with an interim loan capped at $50 million and letters of credit from pre-bankruptcy secured lenders led by Wells Fargo Bank NA, Bloomberg News reported yesterday. A bankruptcy judge on Friday signed an interim order approving the loan and allowing the company to use cash representing collateral for secured lenders’ claims. Alco filed for chapter 11 protection on Oct. 12 with a commitment from the lenders to provide senior secured financing consisting of a $110 million revolving credit and a term loan of about $12.7 million. In addition to funding the chapter 11 effort, the loans will be used to repay pre-bankruptcy debt. A hearing to approve the financing package on a final basis is scheduled for Nov. 12.