It was announced on Wednesday by the Sears Holding Corporation that an agreement has been made that will facilitate the reduction of contributions by the department store of the U.S. The decline in pension payments is agreed to ensue for about two years and the once protected real estate will now be monetized.
Over 400 million dollars will be paid by the company to the agency of the government that manages and moderates private sectors, Benefit Guaranty Corp. This was a stipulation the agreement that was reached, the money expected to be remitted to said the company would come from all the land and estate properties that were put aside for the purpose of garnering funds for pension.
About 1.8 billion dollars was the total deficit for Sears’ pension at the end of July. The Benefit Guaranty Corp arrived at a consensus with Sears two years back that will see to the protection of the pension.
Sears to consider reduced interest payments options
Following the establishment of the deal, Sears is set to raise close to 40 million dollars this year alone on payments that will be due this next month, then 20 million dollars will be next years’ due.
Sears in a report revealed that it had given about 5 billion to the plans made for pensions since the year where Kmart and Sears were merged, that is, 2005.
It is anticipated by the retailer that a net loss worth a little over 500 million dollars will be incurred, due to the declining sales it had earlier reported, about last year ago, the net store closures amounted to $750 million.
Sears in 2018 has planned to review available alternatives in a bid to reduce the interest paid on cash substantially.