Sears pulls the trigger on Sears Canada divestment

In keeping with its previously announced plans, Sears Holdings Corp. has officially sold the majority of its 51% stake in Sears Canada, lowering that number to 12%.

The move is expected to generate as much as $380 million in cash for Sears Holdings, which recently applied for a loan through CEO Edward Lampert's hedge fund in order to help the retailer sustain operations through the upcoming holiday season.

"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," said Sears Holdings CFO Rob Schriesheim.

He added that Sears Holdings, now in a position to "meet all of its obligations," is now dealing with about $1.5 billion in additional liquidity thanks to the sale, the Lands' End spinoff, various real estate transactions made recently and the loan Sears procured from Lampert's hedge fund.

"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," added Schriesheim.

The retailer said Edward Lampert and his hedge fund would buy about half of the 40 million shares being offered.

Current shareholders will be able to buy one share of Sears Canada for each share they they currently hold. The shares are being offered for a price of C$10.60 each.

Sears Holdings had initially made an announcement in May that it was "exploring strategic alternatives for its 51% interest in Sears Canada, including a potential sale of Sears Holdings' interest or Sears Canada as a whole."

The news comes just days after Sears Canada CEO Douglas Campbell announced his plans to step down, citing family concerns back home.