Sears chairman Eddie Lampert submits $4.6bn bid to buy retail chain

10 December 2018 (Last Updated December 11th, 2018 07:26)

US-based department store chain Sears Holdings (SEC) chairman Eddie Lampert has submitted a $4.6bn bid through his hedge fund ESL Investments to acquire the retail firm out of bankruptcy.

Sears chairman Eddie Lampert submits $4.6bn bid to buy retail chain
ESL Investments submitted a $4.6bn bid to buy Sears Holdings out of bankruptcy. Credit: Jonrev.

US-based department store chain Sears Holdings (SEC) chairman Eddie Lampert has submitted a $4.6bn bid through his hedge fund ESL Investments to acquire the retail firm out of bankruptcy.

Bloomberg reported that the $4.6bn preliminary bid is a combination of cash, equity new loans, and debt swaps.

The billionaire is planning to save the retail firm, as well as 50,000 jobs out of the total 68,000 by acquiring the whole business instead of just selected store portfolio.

The retailer with its subsidiaries filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the US Bankruptcy Court for the Southern District of New York in October.

Sears also recently received approval for its first day motions for its voluntary Chapter 11 restructuring from the court.

“We believe that a future for Sears as a going concern is the only way to preserve tens of thousands of jobs.”

Bloomberg quoted a statement from ESL Investments as saying: “We believe that a future for Sears as a going concern is the only way to preserve tens of thousands of jobs and bring continued economic benefits to the many communities across the United States that are touched by Sears and Kmart stores.”

Lampert will fund the total $4.6bn through a $950m of new loan alongside other debts. He holds around $2.6bn of borrowings of Sears and now plans to convert much of it into equity once the retail firm is reorganised.

He is also banking on rollover of about $271m of cash collateral, and plans to assume $1.1bn worth of liabilities through gift cards and loyalty programmes, reported Bloomberg.

Last month, the retailer also received approval from the US Bankruptcy Court for the Southern District of New York to raise $350m bankruptcy financing.