Sears to cut Sears Canada stake to raise cash for holiday season
By Sruthi Ramakrishnan
(Reuters) - Struggling Sears Holdings Corp (SHLD.O: Quote) said it would raise up to $380 million by selling most of its stake in Sears Canada Inc (SCC.TO: Quote) through a rights issue, generating much-needed cash ahead of the crucial holiday shopping season.
Sears Holdings, which has been posting losses since mid-2012, has been closing stores, cutting inventory and selling property and assets after nearly a decade of falling sales.
The company's stake in its beleaguered Canadian unit will fall to about 12 percent from 51 percent after it sells 40 million shares in the rights issue.
Shareholders of Sears Holdings will have the right to buy one share of Sears Canada for each share held, at a price of C$10.60 per share.
Sears Canada's shares closed at C$11.12 on the Toronto Stock Exchange on Wednesday. The stock was down 1 percent at C$11 in early trading on Thursday.
Sears Holdings shares rose 5 percent to $26.47 on the Nasdaq.
The rights will be issued to Sears Holdings shareholders on record as of Oct. 20.
Sears Canada will also apply for a Nasdaq listing. Continued...