Sears Takes a Loan of $200M from CEO

Retail company Sears Holdings Corp. (NASDAQ: SHLD) secured a standby letter of credit facility for $200 million that will allow the company to fund its operations. The liquidity comes from affiliates of ESL Investments, the hedge fund operated by CEO Edward Lampert. CFO Jason Hollar said Sears will take actions to make liquidity and adjust its capital structure. The stock jumped over 5 percent following Sears’s statement.

According to Business Insider, its not a good sign that the company is seeking financing at the end of the holiday season, however, when retailers are typically flush with cash. In a statement on the loan, Sears CFO Jason Hollar said: “As Sears Holdings has consistently shown, we will take actions to adjust our capital structure, generate liquidity, and manage our business to enable us to execute on our transformation while meeting all of our financial obligations. This new standby letter of credit facility further demonstrates that Sears Holdings has numerous options to finance our business strategy.”

Over the past two years, Lampert and his hedge fund have loaned Sears more than $800 million — not including this most recent cash infusion — to keep the business in operation.

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