HOFFMAN ESTATES, Ill.,
Sept. 4, 2015 /PRNewswire/
-- Sears Holdings Corporation (the "Company") (NASDAQ: SHLD)
today announced that it has been in discussions with the Pension
Benefit Guaranty Corporation ("PBGC") with respect to the Company's
rights offering and sale-leaseback transaction with Seritage Growth
Properties, a recently formed, independent publicly traded real
estate investment trust, which closed on July 7, 2015, and the Company has entered into a
binding term sheet for a five-year agreement (the "Agreement") with
PBGC, subject to entry into definitive documentation in the next 60
days. Pursuant to the Agreement, the Company will continue
(as it has since at least 2006) to protect, or "ring-fence,"
pursuant to customary covenants, the assets of certain special
purpose subsidiaries (the "Relevant Subsidiaries") holding real
estate and/or intellectual property assets.
Under the definitive documentation, the Relevant Subsidiaries
will grant PBGC a springing lien on the ring-fenced assets, which
lien would be triggered only by (a) failure to make required
contributions to the Company's pension plan (the "Plan"), (b)
prohibited transfers of ownership interests in the Relevant
Subsidiaries, (c) termination events with respect to the Plan, and
(d) bankruptcy events with respect to the Company or certain of its
material subsidiaries.
The Company will continue to make required contributions to the
Plan, the scheduled amounts of which are not affected by the
Agreement. The Company has consistently managed its business
such that it is able to meet its obligations to the Plan despite
the historically unprecedented low interest rate environment.
Although the Company believes that no basis exists under ERISA for
an involuntary or distress termination of the Plan, PBGC has
further agreed to forbear from initiating an involuntary
termination of the Plan, except upon the occurrence of specified
conditions.
"This agreement results from good faith discussions between the
PBGC and the Company and is another positive step forward for the
Company; it provides meaningful protections to the PBGC while
preserving the Company's financial and operational ability to
continue implementing the transformation," said Edward S. Lampert, Sears Holdings' Chairman and
Chief Executive Officer.
Forward-Looking Statements
This press release contains forward-looking statements,
including about our transformation through our integrated retail
strategy, our plans to redeploy and reconfigure our assets, our
liquidity and our ability to exercise financial flexibility as we
meet our obligations and possible strategic transactions.
Forward-looking statements, including these, are based on the
current beliefs and expectations of our management and are subject
to significant risks, assumptions and uncertainties that may cause
our actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by these forward-looking statements. The
following additional factors, among others, could cause actual
results to differ from those set forth in the forward-looking
statements: our ability to offer merchandise and services that our
customers want, including our proprietary brand products; our
ability to successfully implement our integrated retail strategy to
transform our business; our ability to successfully manage our
inventory levels; our ability to successfully implement initiatives
to improve our liquidity through inventory management and other
actions; competitive conditions in the retail and related services
industries; worldwide economic conditions and business uncertainty,
including the availability of consumer and commercial credit,
changes in consumer confidence and spending, the impact of rising
fuel prices, and changes in vendor relationships; vendors' lack of
willingness to provide acceptable payment terms or otherwise
restricting financing to purchase inventory or services; possible
limits on our access to our domestic credit facility, which is
subject to a borrowing base limitation and a springing fixed charge
coverage ratio covenant, capital markets and other financing
sources, including additional second lien financings, with respect
to which we do not have commitments from lenders; our ability to
successfully achieve our plans to generate liquidity through
potential transactions or otherwise; potential liabilities in
connection with the separation of Lands' End, Inc. and disposition
of a portion of our ownership interest in Sears Canada, Inc.; our
extensive reliance on computer systems, including legacy systems,
to implement our integrated retail strategy, process transactions,
summarize results, maintain customer, member, associate and Company
data, and otherwise manage our business, which may be subject to
disruptions or security breaches; the impact of seasonal buying
patterns, including seasonal fluctuations due to weather
conditions, which are difficult to forecast with certainty; our
dependence on sources outside the United States for
significant amounts of our merchandise; our reliance on third
parties to provide us with services in connection with the
administration of certain aspects of our business and the transfer
of significant internal historical knowledge to such parties;
impairment charges for goodwill and intangible assets or
fixed-asset impairment for long-lived assets; our ability to
attract, motivate and retain key executives and other associates;
our ability to protect or preserve the image of our brands; the
outcome of pending and/or future legal proceedings, including
shareholder litigation, product liability and qui tam claims
and proceedings with respect to which the parties have reached a
preliminary settlement; the timing and amount of required pension
plan funding; and other risks, uncertainties and factors discussed
in our most recent Annual Report on Form 10-K and other filings
with the Securities and Exchange Commission. While we believe that
our forecasts and assumptions are reasonable, we caution that
actual results may differ materially. We intend the forward-looking
statements to speak only as of the time made and do not undertake
to update or revise them as more information becomes available,
except as required by law.
About Sears Holdings Corporation
Sears Holdings
Corporation (NASDAQ: SHLD) is a leading integrated retailer focused
on seamlessly connecting the digital and physical shopping
experiences to serve our members - wherever, whenever and however
they want to shop. Sears Holdings is home to Shop Your
Way®, a social shopping platform offering members
rewards for shopping at Sears and Kmart as well as with other
retail partners across categories important to them. The Company
operates through its subsidiaries, including Sears, Roebuck and Co.
and Kmart Corporation, with full-line and specialty retail stores
across the United States. For more
information, visit www.searsholdings.com.
NEWS MEDIA CONTACT:
Sears Holdings Public Relations
(847) 286-8371
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SOURCE Sears Holdings Corporation