SEARS CANADA GRANTED EXTENSION OF STAY PERIOD TO OCTOBER 4, 2017, APPROVAL TO COMMENCE SALE AND INVESTMENT SOLICITATION PROCESS

 

SEARS CANADA NEWS RELEASE:

SEARS CANADA GRANTED EXTENSION OF STAY PERIOD TO OCTOBER 4, 2017, APPROVAL TO COMMENCE SALE AND INVESTMENT SOLICITATION PROCESS

• SPECIAL PAYMENTS TO THE DEFINED BENEFIT COMPONENT OF THE SEARS REGISTERED RETIREMENT PLAN, POST-RETIREMENT HEALTH AND DENTAL BENEFITS AND POST-RETIREMENT LIFE INSURANCE PREMIUMS TO CONTINUE TO SEPTEMBER 30, 2017

TORONTO, JULY 14, 2017 /CNW/ - SEARS CANADA INC. ("SEARS CANADA" OR THE "COMPANY") (TSX: SCC) AND CERTAIN OF ITS SUBSIDIARIES (THE "SEARS CANADA GROUP") ANNOUNCE THAT THE SEARS CANADA GROUP HAS OBTAINED ORDERS FROM THE ONTARIO SUPERIOR COURT OF JUSTICE (COMMERCIAL LIST) ("COURT") THAT IT WAS SEEKING IN SUPPORT OF ITS RESTRUCTURING EFFORTS UNDER THE COMPANIES' CREDITORS ARRANGEMENT ACT ("CCAA"), INCLUDING TO EXTEND THE STAY PERIOD PROVIDED BY THE INITIAL ORDER TO OCTOBER 4, 2017 AND TO LAUNCH A SALE AND INVESTMENT SOLICITATION PROCESS ('SISP") TO SEEK OUT PROPOSALS FOR THE ACQUISITION OF, OR INVESTMENT IN, THE SEARS CANADA GROUP'S BUSINESS OR ASSETS.  THE SISP DEADLINE FOR BINDING OFFERS FROM PARTIES INTERESTED IN PURSUING A TRANSACTION IS AUGUST 31, 2017.

AGREEMENT REACHED TO MAINTAIN CERTAIN PAYMENTS AND POST-RETIREMENT BENEFITS

THE COMPANY REACHED AN AGREEMENT WITH A VARIETY OF STAKEHOLDERS AND THEIR COUNSEL TO MAINTAIN SPECIAL PAYMENTS TO THE DEFINED BENEFIT COMPONENT OF THE SEARS REGISTERED RETIREMENT PLAN, PAYMENTS IN SUPPORT OF POST-RETIREMENT HEALTH AND DENTAL BENEFITS, AND POST-RETIREMENT LIFE INSURANCE PREMIUMS UNTIL SEPTEMBER 30, 2017.  AT THAT TIME, THE COMPANY EXPECTS TO HAVE FURTHER CLARITY REGARDING THE POTENTIAL OUTCOME OF ITS RESTRUCTURING EFFORTS UNDER THE CCAA.

DEBTOR-IN-POSSESSION FINANCING APPROVED ON A FINAL BASIS

THE COMPANY PREVIOUSLY ANNOUNCED THAT IT HAD OBTAINED DEBTOR-IN-POSSESSION FINANCING IN THE AGGREGATE PRINCIPAL AMOUNT OF $450 MILLION (THE "DIP FINANCING"), WHICH IS EXPECTED TO PROVIDE THE SEARS CANADA GROUP WITH SUFFICIENT LIQUIDITY TO MAINTAIN BUSINESS OPERATIONS THROUGHOUT THE CCAA PROCEEDINGS.  THE DIP FINANCING WAS APPROVED BY THE COURT ON A FINAL BASIS.

THE COMPANY HAS ALSO FILED MOTION MATERIALS REGARDING THE COMMENCEMENT OF A LIQUIDATION PROCESS AT THE SEARS CANADA LOCATIONS THAT ARE CLOSING AND EXPECTS TO SEEK AN ORDER REGARDING THE LIQUIDATION PROCESS ON JULY 18, 2017.