Lampert is seeking to restructure the retailer’s roughly $1.1 billion in debt that will be due in 2019 and 2020. In addition, he wants the retailer’s board to sell $1.5 billion in real estate assets, and is seeking to have the retailer divest $1.75 billion in assets such as Kenmore and Sears Home Services.
The plan, in all, would bring the retailer’s approximately $5.5 billion worth of debt to around $1.24 billion per a securities filing from Lampert’s hedge fund, ESL Investments Inc. According to the filing, “Sears now faces significant near-term liquidity constraints.” WSJ also noted that the retailer has a payment of $134 million due next month, “which isn’t part of the proposed restructuring.”
The news comes after ESL Investments said in August that it was seeking to purchase Sears Holdings’ Kenmore brand, as well as the retailer’s home improvement unit. ESL Investments is a hedge fund controlled by Lampert.
The hedge fund is seeking to buy Kenmore for a price of $400 million, although the value could change at the time of a potential closing. In a filing with the U.S. Securities and Exchange Commission (SEC), ESL Investments has been talking with partners that could be part of a deal. The hedge fund said at the time that a purchase could happen based on “ESL’s receipt of equity financing from a potential partner on terms acceptable to it.”
In addition, ESL Investments’ proposal mentioned purchasing the retailer’s home improvement business for $70 million. The hedge fund was also reportedly considering a deal for the company’s Parts Direct business, although its first focus was on a deal for the home improvement business and Kenmore.