Eddie Lampert, the manger of hedge funds, who operates Sears Holding Corp, is again ready to receive financing for the retail chain that continues to lose money.
ESL Investments, owned by Lampert, will be lending $300 million to Sears, the company based in Illinois said on Thursday in a prepared statement.
The new loan is to be secured by a lien against the inventory of Sears as well as its receivables and other forms of working capital.
This announcement comes following another three-month period of dropping sales and more losses, renewing the concerns about the chain’s future.
Sears lost close to $395 million equal to $3.70 per share during the period, in comparison to a $208 million profit equal to $1.84 per share for the same period one year ago.
The results from one year ago were helped by a spinoff of $2.7 billion in properties into a REIT. Sales at same stores were down over 5.2%.
Lampert, the CEO and largest shareholder at Sears, has sold assets as well as closed stores trying to stem the continued burning of cash by the company. Sears said as well that in May it would explore its different options for its Craftsman tools, DieHard batteries and Kenmore appliances brands.
That would continue a number of transactions that included its spinoff of clothing unit Lands’ End and the majority of its holdings in Sears Canada.
Under the proposal of ESL, Sears may seek new investors to lend up to $200 million on terms that are the same, said Sears. The financing should close in between 7 and 10 business days said company officials.
The terms of the deal were approved by board, with advice coming from legal and financial advisers to the board, said the company.
Sears stock was down 6.6% on Wednesday prior to the company reporting earnings. Stock has fallen over 29% during 2016 in comparison to a gain of 8.3% in the Russell 2000 Consumer Index.
Lampert pledged to make a leaner retailer that is focused on sales through multiple channels. He invested heavily in digital as well as loyalty programs for the company in an attempt to cope with mall traffic slowing down.
However, sales at same stores, a common metric used for determining performance, have not stabilized, dropping each quarter but one since the CEO merged Sears and Kmart over 11 years ago.