Sears Canada says it's running out of cash and reveals 'significant doubt' it can stay in business

Sears Canada said Tuesday it has "significant doubt" about its ability to stay in business, and is looking at a possible restructuring or sale.

The company said its forecasted cash flows from operations will not be enough to cover its obligations coming due over the next year.

Sears Canada had expected to be able to borrow up to $175 million to pay off its debts, but has only been able to negotiate an amount of up to $109 million.

"Accordingly, such conditions raise significant doubt as to the company's ability to continue as a going concern," the company said.

"Going concern" refers to a company's ability to stay in business.

The retailer said it has hired BMO Capital Markets as its financial adviser and Osler, Hoskin & Harcourt LLP as its legal adviser as it struggles to meet its financial obligations.