Sears Holdings lines up $200M in financing to stay afloat

Shares in Sears Holdings Corp., the struggling retailer backed by hedge fund manager Eddie Lampert, rose the most in almost two months on Thursday after it lined up a $200 million letter of credit to help fund its money-losing operations.

The amount could be expanded to as much as $500 million with the consent of lenders, according to a statement Thursday. Affiliates of ESL Investments Inc.—a firm run by Lampert, who also serves as Sears’s chief executive officer, is providing the promise of funding through Citigroup Inc.

The hedge fund manager, who is also Sears’s biggest investor, became CEO of the business almost four years ago.

The stock jumped as much as 8.7 percent, to $8.89 per share, following Sears' statement Thursday, marking the biggest intraday gain since Nov. 14. The shares had lost more than 60 percent of their value this year before the latest rally.

Earlier this month, Sears reported another huge quarterly deficit—$748 million—bringing its total losses to $9.35 billion in the past eight years. The company needs to raise about $1.5 billion to make it through 2017 comfortably, according to Christina Boni, an analyst at Moody’s Investors Service.

Sears Chief Financial Officer Jason Hollar said in Thursday’s statement that the company has numerous options for financing.

“We will take actions to adjust our capital structure, generate liquidity and manage our business to enable us to execute on our transformation while meeting all of our financial obligations,” he said.

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