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Tags: carl icahn | sears | bonds | bankruptcy

Carl Icahn 'Taking A Look' at Bonds of Bankrupt Sears

sears store logo in white and blue on brown background with tilt to left

By    |   Monday, 15 October 2018 01:46 PM EDT

Investment guru Carl Icahn said he was looking at bonds of Sears Holdings Corp., but had yet to take a position.

"Obviously there's a lot of problems there and, you know, now it's in bankruptcy and maybe some of the bonds will be interesting – we're taking a look at some of them," Icahn told CNBC's Halftime Report.

Sears filed for Chapter 11 bankruptcy on Monday with a plan to close about 142 of its 700 stores by the end of the year, throwing into doubt the future of the century-old retailer that once dominated U.S. malls but has withered in the age of internet shopping, Reuters reported.

The bankruptcy filing to reorganize debts of the parent of Sears, Roebuck and Co and Kmart Corp follows a decade of revenue declines, hundreds of store closures, and years of deals by billionaire Eddie Lampert in an attempt to turn around the company he acquired in 2005 for $11 billion.

Lampert, who stepped down as Sears CEO on Monday but will remain chairman, had pledged to restore Sears to its glory days, when it owned the tallest building in the world and companies that included a radio station and Allstate insurance.

"I know Eddie Lampert a little bit. He's a smart guy," Icahn added.

"I'm not going to second guess what they did," Icahn said. "Obviously it didn't work but that's what it is. We all have our downs. We all have our problems."

The company, which has close to 70,000 employees, has not turned a profit since 2011, and critics say Lampert let the stores deteriorate over the years, even as he bought the company’s stock and lent it money, making him its largest shareholder and creditor.

Lampert and his hedge fund ESL Investments Inc own just shy of 50 percent of Sears’ shares and are its biggest creditor, with about $2.5 billion owed to him and ESL. He has so far not disclosed whether he has turned a profit or loss since he invested in Sears following years of complex financial engineering at the company.

The company listed $6.9 billion in assets and $11.3 billion in liabilities in documents filed in the U.S. Bankruptcy Court in the Southern District of New York. Its debt to Pension Benefit Guaranty Corp, a U.S. government agency overseeing the retirement benefits of former Sears workers, was not disclosed in the bankruptcy filing. 

Sears said it will sell assets and begin closing 142 unprofitable stores by year-end with the aim of reorganizing around a smaller base of its best stores. It had earlier announced the separate closing of 46 unprofitable stores, and said Monday that is expected to be completed next month.

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Investment guru Carl Icahn said he was looking at bonds of Sears Holdings Corp., but had yet to take a position.
carl icahn, sears, bonds, bankruptcy
Monday, 15 October 2018 01:46 PM
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