Sears Holdings Corporation (NASDAQ:SHLD) is set to pocket $446.5 million in gross proceeds, following the expiration of rights offering, which will subsequently trigger the separation of Sears Hometown and outlet businesses. Sears holdings announced that the offering expired yesterday at 5.00 p.m, New York City time, as earlier scheduled. However, the Illinois-based specialty retailer had indicated that there was a possibility of extending the offering, subject to approval by the board of directors.
Preliminary statistics from the offering indicated that 95% of the $0.01 par value, Hometown shares of common stock on offer had been subscribed, subject to exercise by the rights holders. Furthermore, investors who exercised their subscription rights are earmarked to have requested to purchase additional common stock, pursuant to oversubscription privileges, such that the rights offering is expected to be fully subscribed, noted The Sacramento Bee.
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Subsequently, Sears Holdings Corporation (NASDAQ:SHLD) will be issuing a total of 23.1 million shares of common stock to subscribers, who successfully paid their subscribed rights in full, subject to the exercise of the over-subscription privilege. This will result in an estimated aggregate gross proceeds of $346.5 million from the rights offering.
Additionally, Sears hometown will enter into an asset-based, senior secured, revolving credit facility with a group of financial institutions, to provide a maximum of $250 million, as part of the separation transactions. The company plan to use some of the credit facility to pay cash dividends to Sears Holdings amounting to $100 million, prior to the separation.
Notwithstanding, subscription rights not exercised before the expiration on October 8th 5.00 p.m, as noted earlier, are no longer exercisable.
The report also noted, “the results of the rights offering and Sears Holdings’ estimates regarding the number of shares to be issued and the gross proceeds to be received by Sears Holdings are preliminary and subject to finalization and verification by the subscription agent, Computershare, Inc”. However, Sears Holdings expects Computershare, Inc. to conclude the tabulation of the results today, October 9.
Furthermore, the retail chain expects that on October 11, after Computershare, Inc. completes all allocations and adjustments, as per the terms of the rights offering, “the rights offering will be completed, and the subscription agent will distribute, by way of direct registration in the book-entry form, the shares of Common Stock to holders of subscription rights who validly exercised their subscription rights and paid the subscription price in full,” the company revealed, adding that no physical certificates will be issued.
At the end of it all, Sears Holdings Corporation (NASDAQ:SHLD) expects Sears Hometown shares to begin trading at the NASDAQ stock exchange on October 12, under ticker, (NASDAQ:SHOS).
At the time of this writing, Sears Holdings Corporation (NASDAQ:SHLD) stock was trading at $58.70 per share, up $0.12, or 0.20% rise from yesterday’s close.