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Sears Proposed Rights Offering to Raise Much Needed Cash

Jamie Mason
Richard Collings
10/21/14 5:28 PM EDT
The Deal's senior editor Jamie Mason talks to colleague and senior writer Richard Collings about Sears Holdings approval of a rights offering to its shareholders, that could raise over $600 million in cash for the troubled retailer. On Monday, Sears said it approved the rights offering, in which shareholders can purchase up to $625 million in unsecured notes and warrants to purchase shares of its common stock. The Hoffman Estates, Ill.-based parent of Sears and Kmart department store chains said the proceeds would be "used for general corporate purposes." That is going to be essential as the company comes up against the critical holiday season, as there have been vendor concerns about Sears' ability to pay. The troubled retailer needs the capital, as it may end up burning through $1.5 billion or more in cash this year. The rights offering could also be an opportunity for shareholders to improve their position in Sears' capital structure.
Stocks in this video: SHLD

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