By  on September 25, 2018

Edward S. Lampert’s bailout plan to eliminate $4.35 billion in Sears Holdings Corp.’s debt load isn’t enough to avoid further restructuring. That’s according to credit ratings agency Fitch Ratings, which said the proposals are “insufficient to avoid further restructuring given negative EBITDA trends [earnings before interest, taxes, depreciation and amortization] and ongoing liquidity needs.”

Lampert’s plan includes $1.75 billion in asset sales, comprising the Kenmore brand and the Sears home improvement and services businesses. The idea was raised by Lampert earlier this year in an effort to stave off a Sears bankruptcy filing down the road. The plan for ESL, Lampert’s hedge fund, to acquire the businesses was formalized into a proposal in August. In addition, the plan counts on $1.47 billion in real estate transactions and a $1.12 billion debt conversion. The latter would make debt holders become stockholders. And while it would cut the debt load by $4.35 billion, it would still leave Sears owing $1.24 billion.

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