levin70

Sears Faces Risk If Economy Doesn't Improve

Some points of interest missed by everyone in the discussion above me.

Credit line availability is currently 2.5 billion and does not include a pledging of real estate assets. Credit line expires in Mid 2010.

Authorization on buyback is down to $143mm so even if lampert wanted to do something stupid, I doubt he could make it fly.

So, even if sears continues to burn cash at $1 billion per year, it has availability under its credit lines to meet that cash burn rate. In addition, any time additional cash is needed, they can shut down non-performing stores and sell off the real estate. Or they could enter into a large sale-leaseback with any number of REITS that specialize in this. This could generate significant amounts of upfront cash for SLHD.

Could things get worse than an annual $1 billion burn rate, sure could, but they have time to make changes to correct things as it stands now - whether they can or will is yet to be seen

Kind Regards