The Real Deal New York

Sears chief proposes mass real estate selloff to avoid bankruptcy

Edward Lampert is pushing to restructure the retailer by selling assets and refinancing debts
September 24, 2018 03:15PM

A bankruptcy notice overlaid with an illustration of Edward Lampert (Credit: ValueWalk via Flickr and iStock)

The chief executive of Sears Holdings is making a last ditch effort to save the company from bankruptcy, by proposing the company’s creditors restructure over $1 billion in debt and sell off more real estate.

Edward Lampert, who also serves as Sears’ chairman and is the company’s largest creditor and controlling shareholder, has asked the board to sell $1.5 billion of property and divest other assets, according to the Wall Street Journal.

The move has promise, after reports emerged last month that Sears’ former real estate is turning a profit. In a $2.7 billion deal, the company sold more than 200 stores to Seritage Growth Properties, a real estate investment trust that was started to convert former Sears and Kmart stores. Its share price jumped to $49 last month, from $41.

Lampert’s latest proposal, which was made public Monday, includes a request to restructure $1.1 billion of debt that comes due next year and in 2020. Under the plan, Sears debt would also be reduced to about $1.24 billion from $5.5 billion . Analysts say the company needs to raise close to $1.5 billion a year to stay afloat. Since 2011, the company has lost over $11 billion, and its sales have more than halved to $16.7 billion in that period. [WSJ] — David Jeans