The Plano, Texas-based struggling retailer J.C. Penney Company, Inc. (NYSE:JCP) said in a statement today that it has received a five-year loan commitment from Goldman Sachs Group, Inc. (NYSE:GS) in an attempt to boost liquidity. The loan will be secured by the retailer’s real estate and other assets. Proceeds from the loan will be used to discharge the 7.125% notes due in 2023, and for working capital.
J.C. Penney Company, Inc. (NYSE:JCP)’s re-appointed CEO Myron Ullman has been trying aggressively to boost the company’s financial position after sales declined 25% and it posted huge losses last year. Ullman replaced Ron Johnson earlier this month. J.C. Penney Company is in the midst of restructuring home departments in about 500 stores. On April 15, 2013, J.C. Penney Company, Inc. (NYSE:JCP) drew $850 million from its $1.85 billion revolving credit facility to meet the working capital, operating and capital expenditure needs. The company has already used most of its cash reserves to fund the transformation, and had just $930 million at the end of the fourth quarter.
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The home departments that are under renovation make up about 15% of the company’s total square footage. According to Bloomberg, J.C. Penney Company, Inc. (NYSE:JCP) has postponed the opening of some of the sections due to construction delays. Four senior company executives who were responsible for renovations left the company last week, so media events to launch the renovated stores have been pushed back to June 6.
Former chief executive officer Ron Johnson had planned to transform most of the stores in branded boutiques. But despite all the attempts Johnson failed miserably to revive the retailer. Finally, he was ousted earlier this month.
On last Thursday, the company got another boost after billionaire hedge fund manager George Soros revealed in an SEC filing that he owns 7.9% stake in J.C. Penney Company, Inc. (NYSE:JCP). Soros owns over 17 million shares that are currently valued at above $300 million.
J.C. Penney Company, Inc. (NYSE:JCP) shares were up 2.55% to $17.43 at 9:37 AM EDT.