Sears Holdings Corp. nailed down a commitment for another loan to keep its doors open as the critical holiday season begins.
Great American Capital Partners, a specialty finance company, agreed to lend $350 million to the bankrupt retailer, according to a court filing Wednesday.
The funding would come at a steep price, charging Libor plus 11.5 percent and a 3 percent closing fee.
Sears needs the cash to stay afloat during its most important selling period and buy time to develop a long-term survival plan.
The company filed for court protection from creditors last month with only $300 million to get it through the bankruptcy process, and initially said it needed a second round of so-called debtor-in-possession financing to stay in business.
“The holiday season, the weeks coming up, are really critical for the company and its ability to reorganize,” Sears lawyer Ray Schrock said in a bankruptcy court hearing Thursday.
Chairman Edward Lampert is working on a bid for some of the company’s best-performing stores, which could involve swapping his debt holdings for the outlets.
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Lampert, through his hedge fund ESL Investments, owns the majority of Sears’s debt in addition to being the biggest shareholder of the Hoffman Estates, Ill.-based retailer.
Great American, owned by the B. Riley Financial investment bank, provides financing and often serves as a liquidator when a retailer collapses.
It was among the firms that helped dismantle Bon-Ton Stores and Gordmans Stores.