Sears eyes possible liquidation as ESL bid fails

NEW YORK (Bloomberg): Sears Holdings Corp. is preparing to potentially wind down the iconic retailer after Chairman Eddie Lampert’s bid to buy several hundred stores out of bankruptcy fell short of bankers’ qualifications, according to people with knowledge of the matter.

The retailer started laying the groundwork for a liquidation after a series of meetings on Friday in which its advisers weighed the merits of a $4.4 billion (Dh16.1 billion) bid by Lampert’s hedge fund to buy Sears as a going concern, said the people, who asked not to be identified because the discussions are private.

While Lampert’s ESL Investments has failed to convince the bankers of the viability of its bid, it could still make last-minute improvements before a status hearing on Tuesday. Lampert also has outlined a backup plan in which ESL would pursue the purchase of some of Sears’s parts, including real estate and intellectual property, such as its brand.

Spokesmen for Sears and ESL declined to comment, as did a representative for Lazard, which is advising Sears.


The retailer, which includes its namesake department-stores and the Kmart chain, entered Chapter 11 protection in October with the hope that it could emerge from bankruptcy with less debt and a smaller group of more profitable stores. The bid Lampert submitted in late December intended to keep 425 stores open, while preserving up to 50,000 jobs.

But as representatives for the company — along with creditors and other parties — met in New York on Friday to assess the merits of the bid, they found a number of shortcomings, people with knowledge of the discussions said.

Gaps remained in some of the financing for the proposal, and the plan wouldn’t have provided enough cash to cover costs incurred in the bankruptcy, the people said; it also undervalued inventory and other assets relative to what liquidators were promising to pay.

Another key sticking point: much of Lampert’s bid rested on him getting ownership of the reorganised business in exchange for the forgiveness of $1.3 billion of debt he holds.

But the validity of those very claims — racked up in a series of spin-offs, refinancings and other transactions — has already been challenged by a group of creditors. The ESL plan didn’t include a cash backstop for that part of the bid.

ESL has said its liens are valid and came after the firm extended more than $2.4 billion of secured financing to keep Sears afloat.

Lampert’s bid included a secondary proposal were the going-concern offer to fall through. It included buying selected real estate for $1.8 billion and Sears intellectual property, such as the brand name. Much of that plan would also be funded by forgiving some of the debt he holds.

Dubai Industrial Park marks opening of new mall

DUBAI (Gulf News): Dubai Industrial Park (DI), a manufacturing and logistics hub in Dubai and a member of Tecom Group, has announced the official opening of its first retail offering, Sapphire Mall.

Developed with an investment of more than Dh100 million, the 215,000-square-foot retail and dining facility is the first project to be completed by Dubai Industrial Park in collaboration with Sapphire Investments.

The hub is located close to Maktoum Airport, Jebel Ali Port and the Expo 2020 Dubai site. Speaking on the occasion, Saud Abu Al-Shawareb said the opening of the new mall not only serves their ambitious plans to position Dubai Industrial Park as a lucrative hub for business investment, but also reflects their commitment towards the community.

“We believe that community shopping centres play an important role in improving the quality of life of the people living within the destination. Aligned with our vision of creating opportunities and special moments for our community, we are dedicated to providing our residents with fully-equipped stores and best-in-class services.”

For his part, Najeeb Kadiri, director of Sapphire Investments, said the mall is a significant opportunity to provide the destination’s growing community with a range of easily accessible, close-to-home retail facilities that meet their everyday needs.

“With its vast array of shops and restaurants, including Al Madina Hypermarket as the anchor store, the two-storey mall ensures both comfort and convenience. Moreover, integrating our understanding of consumers’ increasing focus on relationships and family, Sapphire Mall boasts remarkable offerings that will make it the community’s go-to destination for unmatched experiences.” The mall’s Al Medina Hypermarket has dedicated sections for fresh and frozen produce, as well as dairy, garments, electronics and household products, among other community-inspired needs.

Once it’s fully operational, the mall will also host money exchange services and medical facilities.

Abdulla Belhoul, Chief Commercial Officer of Tecom Group, Saud Abu Al-Shawareb, managing director of Dubai Industrial Park, Najeeb Kadiri and Mohammed Ali Nocholy, directors of Sapphire Investments officiated the grand opening ceremony of the shopping mall.