Sears Holdings Corp. (shld) shares are soaring after lining up a $200 million letter of credit from CEO Eddie Lampert.
The struggling retailer, which owns the Sears and Kmart chains, has the option to extend the letter of credit to $500 million, Bloomberg reported. Affiliates of Lampert's hedge fund, ESL Investments, are providing the loan through promise of funding from Citigroup (c).
Sears' shares rose by about 8.7% to $8.89 on Thursday, its biggest intraday gain since Nov. 14, according to Bloomberg. Before the jump, Sears' shares had lost over 60% of their value this year due to disastrous declines compared to retail rivals.
Sears CFO Jason Hollar said the company has "numerous options" for funding in a statement.
"As Sears Holdings has consistently shown, we will take actions to adjust our capital structure, generate liquidity, and manage our business to enable us to execute on our transformation while meeting all of our financial obligations," he said, according to Bloomberg. "This new standby letter of credit facility further demonstrates that Sears Holdings has numerous options to finance our business strategy."
The loan is the latest Lampert and his hedge fund has provided the corporation to help it stay afloat. Over the past two years, he has loaned more than $800 million to keep the business going.