Sears gets fresh lifeline from familiar source

Beleagured Sears Holdings is borrowing yet more money from CEO Eddie Lampert's hedge fund.



Lampert's hedge fund, ESL Investments, has agreed to give the company a new line of credit, valued at $200 million. On July 13, Lampert's ESL Partners entered into a short-term line of credit loans, which carry a maturity date of 151 days and a fixed interest rate of 9.75% per year, Sears said.



"This facility is intended to provide the company with the flexibility to generate additional liquidity on an as-needed basis," stated Sears CFO Rob Riecker. "This adjustment to our capital structure demonstrates that Sears Holdings will continue to take actions to generate liquidity and manage our business while meeting all of our financial obligations."



Last week, Reuters reported that Lampert's ESL Partners and Fairholme Capital Management LLC, which together own about two-thirds of Sears Canada, have engaged a legal adviser and are "evaluating, discussing and considering a potential negotiated transaction" with the retailer. Sears Canada, which was spun off from Sears Holdings in 2012, filed for bankruptcy protection in June.