Sears Canada may have to restructure or sell the company, after the retailer raised doubts about its ability to continue operating on Tuesday.
The retailer said its ability to continue as a going concern is dependent on the company’s ability to obtain additional sources of liquidity in order to implement its business plan.
“Based on management’s current assessment, cash and forecasted cash flows from operations are not expected to be sufficient to meet obligations coming due over the next 12 months,” the company said in a statement.
The retailer had expected to be able to borrow up to an additional $175 million, however, based on the current status of negotiations with the lenders, the amount that the retailer expects to borrow has been reduced to $109 million, falling tens of millions short of what was expected, and raising doubts on the company’s ability to continue as currently structured.
“Such conditions raise significant doubt as to the Company’s ability to continue as a going concern,” the company said.
The announcement came as the retailer reported a first-quarter loss of $144.4-million and a 15.2 per cent decline in revenue compared with the same quarter last year.