Business Insider/Jessica Tyler
- Sears filed for bankruptcy last month, saying it would close 142 US stores before year end.
- On Wednesday, the iconic US retailer said it is nearing a deal to increase its existing financing package to $650 million, allowing the 125-year-old retailer open through the coming holidays, Reuters reported.
- Shares soared as mush as 28% following the news.
- Watch Sears trade live.
Sears exploded by as much as 28% Wednesday after a report said it is nearing a deal that would keep it open through the holidays.
The iconic American retailer filed for Chapter 11 bankruptcy last month, saying it received approval to access a $300 million loan to keep it afloat during restructuring, and that it would close 142 US stores before the end of the year.
On Wednesday, Reuters reported that Sears is finalizing a deal with the financial firm Great American Capital Partners and other lenders, to increase the existing bankruptcy financing package to $650 million, allowing the 125-year-old retailer to remain open as Black Friday nears.
In exchange for the $350 million loan, Great American and the other firms are expected to receive some Sears collateral previously held by banks to back the new financing, one of the Reuters sources said.
The loan would give Sears additional breathing room to seek buyers for its assets. Sears picked Great American's proposal for a bankruptcy loan instead of an offer from hedge funds including Cyrus Capital Partners LP, Reuters sources added.
Sears' stock topped out at more than $122 a share in 2007, giving the retailer a market capitalization of nearly $30 billion. But years of losing money and closing stores, along with shifts in consumer spending, and the rise of e-commerce, among other things, eventually leading to a collapse in share price and an its eventual bankruptcy filing.
Sears was down 90% this year, leaving it with a market cap of $30.8 million.
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