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Updated from 7:44 a.m. EDT



) --

J. C. Penney

(JCP) - Get J. C. Penney Company, Inc. Report

is looking to raise more than $800 million in equity as the struggling department store chain looks to build up its cash reserves heading into the holiday season.

The Plano, Texas-based retailer said Friday that it would price 84 million shares of common stock at $9.65 a share, well below the closing price of $10.42 on Thursday.

J.C. Penney announced Thursday night that it was planning the public offering, which is expected to close on Oct. 1. The company said it plans to use the net proceeds for "general corporate purposes" and grant its underwriter,

Goldman Sachs

, a 30-day option to purchase an additional 12.6 million shares.

Shares were tumbling 7.2% to $9.67 in premarket trading.

Reports surfaced this week that the troubled retailer was looking for an equity infusion, possibly as high as $1 billion, to get it through the holiday season.

J.C. Penney shares have had a rocky week, down 20% since last Friday. On Wednesday, Goldman Sachs credit analysts issued a report initiating an "underperform" rating on the company's debt. The analysts said they had concerns about the company's liquidity.

"In our view a combination or weak fundamentals, inventory rebuilding and an underperforming home department will likely challenge J.C. Penney's liquidity levels in

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the third quarter," the Goldman note said. "In order to safeguard against a potentially poor

fourth quarter holiday season, it is likely that management will look to build a bigger liquidity buffer, as has been suggested by recent press reports. Although we believe this would be a prudent measure for the company, given our expectation for new capital to come in the form of debt (rather than equity), we believe this will be a negative catalyst for creditors."

J.C. Penney has already borrowed more than $3 billion this year to fund its turnaround, including a $2.25 billion term loan from Goldman.

J.C. Penney said on Thursday that it was "pleased with its progress thus far in the company's turnaround efforts and the traction its initiatives are starting to achieve," by seeing "greater predictability in its performance across many areas," according to a statement.

The company still anticipates "positive comparable store sales trends coming out of the third quarter and throughout the fourth quarter of 2013."

Separately, J.C. Penney announced Thursday that Mark Sweeney, its controller and a senior vice president, has left the company. He is temporarily replaced by Dennis Miller, the company's senior vice president of finance. Miller was J.C. Penney's previous controller from June 2008 through September 2012.

"Since the company had publicly stated it did not need any additional financing as recently as its Q2 earnings call, this move seems to reflect a new level of concern within the company and likely amongst the vendor community," wrote Wells Fargo Securities analyst Paul Lejuez in a research note.

Lejuez has an "underperform" rating on the company, saying that while the bearish call was never about bankruptcy, it was about what the company's equity was worth.

"The issue to us is the value of the equity. There has been a significant wealth transfer from equity to debtholders over the past year. Now, with current equity shareholders diluted by about 30%, we believe the stock is worth 30% less than it was before," Lejuez wrote.

Between the exits of two large shareholders, Bill Ackman's Pershing Square Capital and

Vornado Realty Trust

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, and now Sweeney, "it's tough to see the light at the end of the tunnel when so many close to the company seem to be losing confidence," Lejuez wrote.

--Written by Laurie Kulikowski in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.