Sears Holdings Corporation Provides Update on actions to generate liquidity, fund its transformation and evolve its capital structure

HOFFMAN ESTATES, Ill., Oct. 2, 2014 /PRNewswire/ -- Sears Holdings Corporation ("Holdings," or the "Company") (NASDAQ: SHLD) today announced that the Company expects to generate up to U.S.$380 million in proceeds from its interest in Sears Canada Inc. ("Sears Canada") by early November 2014, assuming the completion of its previously announced rights offering of Sears Canada shares to the Company's stockholders and the exercise of all such rights. Of this amount, the Company expects to receive at least $168 million in mid-to-late October from the exercise of the rights distributed to them by ESL Partners, L.P. and Edward S. Lampert, Chairman and Chief Executive Officer of Holdings and Chairman and Chief Executive Officer of ESL Investments, Inc., which collectively with their affiliates own 48.5% of Holdings' outstanding common stock.

Fairholme Capital Management, L.L.C. also has advised Holdings that it expects that certain of its clients will participate in the rights offering at levels to be determined, subject to review of the terms and conditions of the rights offering and regulatory considerations.

On October 29, 2013, Sears Holdings announced its intention to maximize the value of its 51% stake in Sears Canada and to generate significant cash proceeds to support its transformation and to create value for its shareholders. Over the course of the past year, Sears Holdings has considered a variety of means to maximize the value of its holdings in Sears Canada, including the retention of Bank America Merrill Lynch in May 2014. After significant consideration, the Sears Holdings board of directors approved the rights offering announced today. It satisfies the dual goals of receiving significant cash value from its stake in Sears Canada and concurrently reducing our investment in Sears Canada, while continuing to retain approximately 12 million shares valued at about $113 million. With one of Sears Holdings' largest shareholders indicating its intent to participate, Holdings will receive significant cash proceeds which will support Holdings' continued transformation as well as operational activities during the upcoming holiday and post-Holiday season.

After the completion of the rights offering, Holdings will continue to work with Sears Canada's board and management to maximize long term shareholder value and to support Sears Canada's strategy.

Rob Schriesheim, Sears Holdings' Chief Financial Officer said, "Proceeds from the rights offering will provide additional liquidity to Holdings as it enters into the holiday period and will be used for general corporate purposes. Together with the $500 million dividend Holdings received in connection with the Lands' End spinoff, the $165 million in proceeds from certain real estate transactions and the $400 million short-term loan the Company recently completed, Holdings will have generated up to $1.445 billion in liquidity in fiscal 2014, further demonstrating the Company's financial flexibility and providing it the means to fund its transformation and meet all of its obligations. As previously announced, over the next six to 12 months, Holdings intends to evaluate its capital structure with a goal of achieving more long-term financial flexibility, and may take other actions as appropriate."

Holdings' receipt of the expected proceeds described in this release is subject to the successful completion of the previously announced rights offering. There can be no assurance that the rights offering will launch or be closed in a timely manner or that it will generate the full amount of expected proceeds.

Forward-Looking Statements

Certain material presented herein includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about the previously announced rights offering, the terms of such rights offering, the dates on which actions relating to such rights offering are expected to occur, future trading of the common stock of Holdings and common shares of Sears Canada, the intent of ESL Partners, L.P. and Edward S. Lampert, the expectations of Fairholme Capital Management, L.L.C., and other statements that describe the companies' plans. Whenever used, words such as "will," "expect," and other terms of similar meaning are intended to identify such forward-looking statements. Forward-looking statements are subject to risks and uncertainties that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Such statements are based upon the current beliefs and expectations of our management and are subject to significant risks and uncertainties, including risks and uncertainties relating to the rights offering of Holdings' interest in Sears Canada, such as the timing and certainty of the completion of that transaction, the operational and financial profile of Holdings or any of its businesses after giving effect to the rights offering, and other factors set forth in the prospectus that will be contained in the registration statement to be filed with the SEC by Sears Canada with respect to the rights offering. A detailed description of other risks relating to Holdings are set forth in our annual report on Form 10-K for the fiscal year ended February 1, 2014 and our other filings with the SEC. We intend the forward-looking statements to speak only as of the time made and, except as required by law, do not undertake to update or revise them as more information becomes available.

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 more than 2,000 full-line and specialty retail stores in the United States and Canada.

NEWS MEDIA CONTACT:
Sears Holdings Public Relations
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SOURCE Sears Holdings Corporation








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