Sears Canada Inc. is paying a special dividend of nearly $377-million to shareholders, money that will mostly wind up in the pockets of Illinois-based majority owner Sears Holdings Corp.
The announcement, after the close of markets Friday, said the Sears Canada board had declared an extraordinary cash dividend of $3.50 per share payable to shareholders of record on Sept. 22.
Meanwhile, Sears said it had deal with a syndicate of lenders for an $800-million senior secured revolving credit facility.
Closing was subject to a number of customary funding conditions and to the prior payment or defeasement of the company's outstanding medium-term notes due Sept. 20, 2010.
"The facility is expected to be available for five years to fund working capital needs, capital expenditures, acquisitions and other general corporate purposes," Sears said in a news release.
As well, the Canadian company said it will make a $400-million loan to Sears Holdings, likely within the next week which is to remain outstanding for no more than 60 days.
Sears Holdings, which owns both the Sears and Kmart retail chains in the United States, holds about 90 per cent of the stock in Sears Canada, a retailer with a network of 197 corporate stores, 241 dealer stores, 31 home improvement showrooms, over 1,800 catalogue merchandise pick-up locations across Canada. It also has 108 Sears Travel offices and a countrywide home maintenance, repair and installation network.