New York Post
Lampert loans Sears $100M
Eddie Lampert is opening his wallet again to keep his Sears and Kmart chains afloat during the crucial holiday shopping season.
The hedge fund mogul, the largest shareholder and chief executive of Sears Holdings, which operates the two chains, is lending the company $100 million for “general corporate purposes,” according to a regulatory filing.
That brings to $499.4 million the total of Lampert’s outstanding loans to the money-losing chains.
The loans, from units of Lampert’s ESL Investments, carry an interest rate of 11 percent and are backed by mortgages of certain stores.
“Lampert has lent the company hundreds of millions of dollars in short-term loans secured against spe- cific stores,” said Marc Cohen, a professor at Columbia Business School who was head of Sears Canada. “They provide the company with operating cash and to create the appearance of liquidity.”
As of July 29, Sears had $212 million in cash on hand, down 23 percent from last year.
The timing of this latest loan, just before the shopping season kicks off, could be aimed at reassuring jittery vendors that Sears has cash to pay them, say industry experts.
Sears has been on a bankruptcy watch list, closing more than 300 stores over the past year. It has lost money for five straight years and has seen sales decline every year since 2006.
Lampert also agreed to lend the struggling retailer an additional $100 million through between now and Dec. 1, if needed — if Sears holdings pledges additional real estate.
The existing loans are due April 3 and the newer loan on July 20, 2020, the filing said.
Shares of Sears Holdings closed Thursday up 1.4 percent, at $7.29.