UPDATE 2-Sears obtains $500 million loan

Fri Apr 8, 2016 1:32pm EDT
 
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(Adds details; updates shares)

April 8 (Reuters) - Sears Holdings Corp said it had obtained a $500 million loan as the retailer looks to boost its cash reserves to fund a transformation and reduce the number of company-owned stores.

The retailer, controlled by billionaire Eddie Lampert, spun off about 254 Sears and Kmart stores in June last year as it looked to shore up its finances.

Sears has been reeling under losses as shoppers move away from malls in favor of online shopping and the company has lost more than $8 billion over the last five years.

Sears said $250 million of the 15-month loan was funded on Friday with the remainder being accessible in the future.

Lampert's ESL Investments Inc provided $125 million of the initial $250 million, Sears said, adding that it had used 13 of its properties as collateral.

The loan is in addition to $750 million announced in March, that Sears closed on Friday.

Sears shares were up marginally at $14.40 in early morning trading on Friday. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D'Silva)