Sears Holdings (SHLD) Sees Generating $380M from Sears Canada in November

Sears Holdings (NASDAQ: SHLD) announced that the Company expects to generate up to U.S.$380 million in proceeds from its interest in Sears Canada Inc. ("Sears Canada") by early November 2014, assuming the completion of its previously announced rights offering of Sears Canada shares to the Company's stockholders and the exercise of all such rights. Of this amount, the Company expects to receive at least $168 million in mid-to-late October from the exercise of the rights distributed to them by ESL Partners, L.P. and Edward S. Lampert, Chairman and Chief Executive Officer of Holdings and Chairman and Chief Executive Officer of ESL Investments, Inc., which collectively with their affiliates own 48.5% of Holdings' outstanding common stock.

Fairholme Capital Management, L.L.C. also has advised Holdings that it expects that certain of its clients will participate in the rights offering at levels to be determined, subject to review of the terms and conditions of the rights offering and regulatory considerations.

On October 29, 2013, Sears Holdings announced its intention to maximize the value of its 51% stake in Sears Canada and to generate significant cash proceeds to support its transformation and to create value for its shareholders. Over the course of the past year, Sears Holdings has considered a variety of means to maximize the value of its holdings in Sears Canada, including the retention of Bank America Merrill Lynch in May 2014. After significant consideration, the Sears Holdings board of directors approved the rights offering announced today. It satisfies the dual goals of receiving significant cash value from its stake in Sears Canada and concurrently reducing our investment in Sears Canada, while continuing to retain approximately 12 million shares valued at about $113 million. With one of Sears Holdings' largest shareholders indicating its intent to participate, Holdings will receive significant cash proceeds which will support Holdings' continued transformation as well as operational activities during the upcoming holiday and post-Holiday season.

After the completion of the rights offering, Holdings will continue to work with Sears Canada's board and management to maximize long term shareholder value and to support Sears Canada's strategy.

Rob Schriesheim, Sears Holdings' Chief Financial Officer said, "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. Together with the $500 million dividend Holdings received in connection with the Lands' End spinoff, the $165 million in proceeds from certain real estate transactions and the $400 million short-term loan the Company recently completed, Holdings will have generated up to $1.445 billion in liquidity in fiscal 2014, further demonstrating the Company's financial flexibility and providing it the means to fund its transformation and meet all of its obligations. 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."

Holdings' receipt of the expected proceeds described in this release is subject to the successful completion of the previously announced rights offering. There can be no assurance that the rights offering will launch or be closed in a timely manner or that it will generate the full amount of expected proceeds.

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