Sears Canada may have to restructure or be sold
Sears Canada has warned that it may have to restructure or be sold, due to doubts about its ability to continue operating.
"Based on management's current assessment, cash and forecasted cash flows from operations are not expected to be sufficient to meet obligations due over the next 12 months," the company said.
This news broke on Tuesday, and following the announcement, shares of Sears Canada fell 27 cents to reach 87 cents on the Toronto Stock Exchange (TSX). They got as low as 50 cents earlier in the day's session.
The firm said its ability to stay afloat is dependent on it gaining additional sources of funding, which it hasn't been able to do.
Sears Canada has been struggling for around a year and a half. In 2015, the retailer sold its distribution centres. The following year, the Toronto company announced losses of $120 million for the quarter ended 29 October.
Sears said the reduced loan size, paired with a lack of other readily available sources of liquidity, means "there are material uncertainties as to the company's ability to continue to satisfy its obligations and implement its business plan."