Sears To Raise Cash Through Canadian Ops Sale

The rights offering to shareholders for the majority of its 51 percent stake in Sears Canada Inc. will give the retailer some breathing room as it heads into the crucial holiday season. The offering comes after Sears failed to find a buyer for the Canadian operations and also the announcement last week that the president and CEO of the unit, Douglas Campbell, would leave at the end of the year. Lampert, a billionaire hedge fund investor, combined Sears and Kmart in 2005 about two years after he helped bring Kmart out from under bankruptcy protection. Credit ratings agency Fitch Ratings called the loan a short-term fix for a "much larger need" of cash and downgraded Sears' credit rating deeper into junk status. Greg Melich, an analyst at International Strategy & Investment Group LLC, wrote Thursday that Sears is "on a glide path to be out of cash by the middle of 2015 without additional asset sales or liquidity initiatives."

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