Sears Holdings buys more time
Sears Holdings Corporation, the parent company of Sears and Kmart stores, has reached an agreement to extend the maturity of its existing term loan, which originally was to mature in June 2018, to January 2019.
The retailer also has option to extend the maturity further to July 2019. Sears Holdings reported that it has paid down the loan by $325 million, reducing the outstanding balance to approximately $400 million and bringing its total term loan repayment during 2017 to approximately $570 million.
Additionally, Sears Holdings has reached a new secured credit facility in connection with its agreement with the Pension Benefit Guaranty Corporation (PBGC) on Nov. 7. The agreement allows for the release of 138 properties from a ring-fence arrangement with PGBC. The move provides Sears with an additional $407 million in funds that will be used to pay $407 million in pension plans and corporate purposes, the company said.
After the $407 million pension contribution, Sears will be “relieved of any obligation to make further contributions to the pension plans” for approximately two years aside from a $20 million supplemental payment due in the second quarter of 2018.
“As indicated in our third quarter earnings announcement, we have taken further action to provide the Company with additional financial flexibility as we enter 2018," said Rob Riecker, Sears Holdings' CFO. "The extension of the term loan improves our short-term debt maturity profile, while the credit facility associated with the PBGC agreement will support our continued commitment to the Company's pension plans while enhancing our financial flexibility."
Last month, Sears reported total revenue fell 26% to $3.7 billion for the third quarter and reported a net loss of $558 million for the period. Sears has closed hundreds of stores in the past year with more set to cash out by the end of January 2018.
"Looking ahead, we continue to explore alternatives with respect to our debt maturities to meaningfully reduce cash interest payments and provide the company greater flexibility,” Riecker added. “In addition to the liquidity actions announced today, we remain focused on improving our performance by diversifying the company's revenue streams through third-party partnerships for several of our businesses; developing new ways to leverage our innovative Shop Your Way platform to better invest marketing dollars at the member level; and maintaining extreme cost discipline in light of continued headwinds across the retail sector.”
Roseburg CEO elected chairman of AWC
Allyn Ford, CEO of Roseburg Forest Products, has been elected chairman of the American Wood Council (AWC), effective January 2018 for a one-year term.
Danny White, a director of T.R. Miller Mill Company, was elected the first vice-chairman, and Neil Sherman, executive vice president of siding at LP Corporation, was elected as second vice-chairman. Current AWC board chairman, Stimson Lumber CEO Andrew Miller, will serve as the immediate past chairman.
Sean McLaren, vice president of U.S. lumber operations for West Fraser, was confirmed as a new member to the AWC board.
“Andrew was at the helm during a time of significant opportunity for the wood products industry,” said AWC President and CEO Robert Glowinski. “With his leadership as chairman this past year we completed important work to prepare for the 2021 code cycle and address challenges we face in the marketplace. I look forward to working with Allyn as we move into the new building code cycle in January, as well as on efforts across all our other programs and activities.”
Based in Leesburg, Va., the AWC represents about 86% of the U.S. structural wood products industry and provides engineering data, technology updates, and standards for wood products to assure safe and efficient building design. The AWC also advocates for government policies that affect wood products.
HBSDealer Stock Watch: Few see gains on Tuesday
Industry stocks lost ground on Tuesday with very few rising. Tractor Supply Company led rising stocks, growing 1.03% and closing at 64.59. The second-biggest winner was PPG, nudging ahead 0.17% to close at $115.89