Sears CEO has warned the company to take action before its mounting debt and constraints in cash get out of hand.
The retail company has $134 million in debt payments due October 15, according to CEO Eddie Lampert, who controls most of the company's shares through his hedge fund. Lampert is suggesting that Sears sells off $1.75 billion in non-real estate assets and $1.5 billion in real estate assets to pay off its debts. He also proposes a restructuring plan for $1.1 billion of the debt, and is trying to get creditors to accept either 25 cents on the dollar for what they are owed or Sears equity in exchange. Lambert implored the company’s Board on Monday to take care of the substantial near-term cash constraints “without delay."
Sears has been hurting from $11.7 billion in losses since 2010, alongwith a 60% drop in sales during the same period. The company said in a statement that it is pursuing Lampert's proposals, with the advice of legal and financial advisers. However, it could not make any guarantees.