The most tangible signs yet of Sears Holdings Corp.’s sales efforts showed up last week with requests to support the sale of assets and Sears’ home improvement business.
The retail giant filed court records on Saturday to sell the Longwood, Florida-based unit, which focused on a $ 60 million lead offer from Service.com Inc. The SHIP store provides home improvement services through more than 2,000 professionals and independent contractors.
Court records show that, subject to an adjustment, Service.com would pay $ 60 million for the SHIP unit and assume certain liabilities. The Farmington Hills, Michigan-based bidder, who connects homeowners with home improvement professionals, would receive a 1.5% dissolution fee if lost at auction.
Interested parties would have until December 11th to fulfill Service.com’s bid plus the termination fee and to deposit 10%. If Sears got a competing bid, it would hold an auction on December 13th.
Judge Robert D. Drain, United States Bankruptcy Court for the Southern Borough of New York at White Plains, would consider approving the sale on December 18. Sears said in a statement on Saturday that the deal would close in early January.
Drain will be hired on November 15th to review proposed tendering procedures for the company. In the same hearing, he is supposed to weigh a motion in support of all sales of assets and a motion for ultimate use of bankruptcy funding.
On October 15, Drain approved the provisional use of a $ 1.83 billion senior bankruptcy loan. Reuters reported Sunday that lenders could reduce the new money in the final loan related to a potential $ 450 million loan from Sears chairman, creditor, and shareholder Eddie Lampert and other parties to $ 150 million.
The filings last week are the first formal steps towards a necessary cut in Sears’ operations.
“As noted earlier, these Chapter 11 cases must move at a deliberate pace to contain the significant operating losses that will further reduce the value of the debtors’ estates,” the retailer wrote in its global bidding motion Thursday. “Accordingly, closing sales transactions quickly that maximize value for debtors ‘estates and preserve as many jobs as possible is a cornerstone of Chapter 11 debtors’ strategy.”
In its most recent filing, Sears said it had been marketing the SHIP business since January and has received expressions of interest this summer, including from Lamperts ESL Investments Inc. In fact, the Securities and Exchange Commission filings show that Lampert completed the acquisition of SHIP in April Entity and Sears’ Parts Direct Appliance Division for $ 500 million and Sears is divesting Kenmore. In August, he offered $ 70 million for SHIP as well as a potential contingent payment of $ 10 million.
However, Sears said it determined Service.com’s offer was the best and made significant strides in negotiating the terms of the deal when the Hoffman Estates, Illinois-based retail giant entered Chapter 11 on Oct.15. Sears claimed it was critical to sell the operation separately from the rest of his assets as it began to deteriorate since the bankruptcy process began.
The retailer sought judicial protection from an impending debt settlement with plans to close 142 stores and reorganize or sell its core locations. A main bid for around 400 “Go Forward” stores is to be achieved by December 15, and an auction is to be held by February 2.
Sears shares, which once traded on the Nasdaq, are now changing hands under the ticker symbol of the pink tier of the OTC markets
((SHLDQ) . On Monday morning, the share was at 19.1 cents, a drop of 3.05%.
A Sears representative and legal counsel did not immediately return requests for comment.
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