Sears Holdings Corp. (NYSE:SHLD) is shedding the majority of its stake in its Canadian unit to raise up to $380 million U.S. to enable it to purchase inventory and reassure suppliers during this crucial holiday shopping season.

The plan is to sell around 40 million Sears Canada Inc (TSE:SCC) shares to mainly its own shareholders, including Edward Lampert and ESL Investments Inc., to raise cash and give the beleaguered retailer some breathing room. Sears Holdings will retain around 12 million shares of Sears Canada, with a total value of nearly $113 million.

Sears Canada Sold Off To Raise Cash

In a statement released Thursday, October 2nd, Sears said it anticipates at least $168 million in proceeds by late October, with the remainder in the first week of November. Both Lampert and ESL have committed to exercising their option to acquire a proportional amount of the new subscription rights.

More on Sears Canada deal

The Sears Canada Inc (TSE:SCC) subscription rights will be tradable securities and can be used to purchase Sears Canada shares at $10.60 Can. each, a significant discount to the October. 1 closing price of $11.12.

Sears Canada Inc (TSE:SCC), a public company that’s controlled by Lampert through Sears Holdings, ESL and  personal holdings, says it fully supports the subscription rights plan.

The new Canadian company is planning to apply for a listing on Nasdaq, where the subscription rights will be traded.

Sears Holdings Corp. (NYSE:SHLD) has faced declining sales for more than five years now, and had already informed shareholders it was exploring options for its troubled Sears Canada operations, Like many brick and mortar retail operations, Sears Canada had seen numerous closures and store downsizings over the last few years amid increased online competition and the arrival of other U.S. retailers.

Sears Canada CEO announced resignation last week

Of note, Sears Canada Inc (TSE:SCC)’s president and chief executive, Douglas Campbell, announced early last week that he plans to resign and return to the U.S. by January 1st for personal reasons.