Recent notes from Fitch Ratings and Credit Suisse analyst Gary Balter underscored troubled retailer Sears Holdings Corp (NASDAQ:SHLD)’s precarious cash situation.

Last week Fitch Ratings down-graded Sears’ long-term Issuer Default Ratings to ‘CC’ from ‘CCC.’ The action reflected concerns regarding its falling profitability and liquidity problems given that the possibility of a turnaround appears unclear and remote.

Sears Holdings Corp (SHLD) needs a lot of cash…fast

“Sears needs to generate a minimum EBITDA of $1 billion annually between 2014 through 2016 to service cash interest expense, capex and pension plan contributions,” said the ratings agency. “Given Fitch’s projections for EBITDA to be negative $1 billion or worse, cash burn (prior to any working capital benefit) is expected to be around $2 billion or higher annually. In addition, Sears needs an estimated $600 million-$700 million in liquidity to fund seasonal holiday working capital needs.”

Credit Suisse analyst Gary Balter was blunt, stating in his research note that Sears was positioned at the edge of a cash precipice and that recent events at the retailer only strengthened his conviction that its end was likely near.

“Let’s face facts. Sears is generating negative operating cash flow of between $1 billion and $2 billion [closer to upper end, it looks like] in 2014,” he said, as quoted by CNBC. “Unless it sells off real assets while somehow maintaining the cash flow from those assets, this story is not likely to have a happy ending, and that ending continues to depend on suppliers.”

Sears Holdings Corp (SHLD) – This time ESL’s loan is not without strings

On Monday, Sears received a cash injection in the form of a $400 million loan from affiliates of Eddie Lampert owned ESL Investments, Inc. The short-term loan is secured by a first lien on 25 real estate properties owned by the retailer and also guaranteed by it. This transaction is a departure from earlier advances by ESL which were unsecured commercial paper.

The news of the loan led to a sharp fall in Sears’ stock because the market surmised that the retailer’s liquidity problems had worsened.

shld-daily-chart Sears SHLD

Sears Holdings Corp (SHLD) Berkowitz lends a hand

A 13D filing yesterday by Bruce Berkowitz’ Fairholme Capital Management LLC and other reporting persons said affiliate The St. Joe Company  was in discussions with Sears regarding the $400 million secured short-term loan disclosed on September 15, 2014.

“The St. Joe Company may invest up to $100 million in participations relating to the Short Term Loan,” said the filing.

According to the filing, Bruce Berkowitz is the beneficial owner of 25,532,673 shares (24%) of Sears Holdings Corp (NASDAQ:SHLD).

Sears Holdings Corp (SHLD) What’s left

Sears still has some family jewels that can be used to raise cash.

According to Fitch, these include a sale of its stake in Sears Canada and unencumbered real estate such as 367 full-line Sears stores, 183 Kmart discount units and 12 Kmart super-centres.  (Of these, 25 properties have now been used to secure the $400 million term loan from ESL affiliates).