CHICAGO -- Sears Holdings Corp.'s most recent cash infusion came from some of its most loyal lenders: affiliates of Chairman and CEO Edward Lampert's hedge fund, ESL Investments.
Sears announced Wednesday it had received a $100 million loan, but it did not disclose the source of the funds. In a regulatory filing Thursday, Sears said entities controlled by Lampert's hedge fund provided the loan, which was backed by "substantially all of the unencumbered intellectual property of the Company and its subsidiaries, other than intellectual property related to the Kenmore and DieHard brands, as well as by certain real property interests," with some exclusions.
Protecting the Kenmore and DieHard brands lets Sears continue seeking ways to generate more cash from its best-known and strongest brands. Sears has widened sales of both brands outside Sears stores, notably listing Kenmore and DieHard products on Amazon. Sears sold its Craftsman tool brand to Stanley Black & Decker last year in a deal valued at $900 million.
The $100 million loan is the latest line of credit from Lampert and affiliates of his hedge fund, bringing the total they have lent in the past two years to more than $1.6 billion, with varying amounts outstanding at any given time.
Sears declined to comment Friday on discussions with lenders. On Wednesday the company said it is taking other steps to try to strengthen its balance sheet, including cutting an additional $200 million in costs, outside of store closures, and attempting to refinance more than $1 billion in debt.
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