No bids in Sears Canada auction

An auction for the majority stake in Sears (NASDAQ:SHLD) Canada proved to be a bust after failing to attract any bids in the latest round. The result is a holdout of what could've been about $750 million of much needed cash for the struggling retailer.

There was talk that Sycamore Partners had an interest in buying out the Canadian properties, but no bid materialized.

The 62-year-old Canadian chain's flop at auction earlier this month was a key factor is forcing Sears Holdings, parent company of Sears and Kmart, to take out a $400 million loan from company chairman Eddie Lampert, reported the New York Post.

Lampert's hedge fund, ESL Investments, demanded 25 of Sears' best locations as collateral for last week's loan agreement.

"Things have not turned out like Eddie hoped, and now he's getting desperate," Mark Cohen, a professor at Columbia Business School and former head of Sears Canada, told the New York Post.

Sears has gone through $1 billion in cash in the first half of the year, leaving it with $863 million on its balance sheet. 

The company says it will continue to explore alternatives after the failed auction. The retailer had hoped to raise $765 million from its 51 percent stake in Sears Canada.

Last fall Lampert sold off a dozen of Canada's best store locations and could be forced to sell off more in the coming months.

For more:
-See this New York Post article

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