Finance
Sears nearing deal to stay open during holidays, shares spike
Business Insider/Jessica Tyler
-
Sears
filed for bankruptcy last month, saying it would close 142 US
stores before year end. -
On Wednesday, the iconic US retailer said it is nearing a
deal to increase its existing financing package to $650
million, allowing the 125-year-old retailer open through the
coming holidays, Reuters reported. - Shares soared as much as 28% following the news.
-
Watch
Sears trade live.
Sears
exploded by as much as 28%, to a high of $0.47, Wednesday after a
report said it is nearing a deal that would keep it open through
the holidays.
The iconic American retailer filed for Chapter 11 bankruptcy last
month, saying it received approval to access a $300 million loan
to keep it afloat during restructuring, and that it would close
142 US stores before the end of the year.
On Wednesday, Reuters reported that Sears is finalizing a
deal with the financial firm Great American Capital Partners and
other lenders, to increase the existing bankruptcy financing
package to
$650 million, allowing the 125-year-old retailer to remain
open as Black Friday nears.
In exchange for the $350 million loan, Great American and
the other firms are expected to receive some Sears collateral
previously held by banks to back the new financing, one of the
Reuters sources said.
The loan would give Sears additional breathing room to
seek buyers for its assets. Sears picked Great American’s
proposal for a bankruptcy loan instead of an offer from hedge
funds including Cyrus Capital Partners LP, Reuters sources
added.
Sears’ stock topped out at more than $122 a share in 2007,
giving the retailer a market capitalization of nearly $30
billion. But years of losing money and closing
stores, along with shifts in consumer spending,
and the rise of e-commerce, among other things, eventually
leading to a collapse in share price and an its eventual
bankruptcy filing.
Sears was down 90% this year, leaving it with a market cap
of $30.8 million.
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