Author Topic: SHLDQ - Sears Holdings Corp  (Read 2844388 times)

SHDL

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Re: SHLDQ - Sears Holdings Corp
« Reply #9240 on: October 19, 2018, 01:22:32 PM »
I was planning to do a joke post at some point on how SHLD could work as an amazing hyperinflation hedge but so much for that idea. 


Mephistopheles

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Re: SHLDQ - Sears Holdings Corp
« Reply #9241 on: October 19, 2018, 01:33:26 PM »
Anyone know the figure for owned unencumbered real estate? As of the last 10-k the company had 1002 stores, and 307 were owned. As of the last Q the company operated 866 stores. 138+88 = 226 are encumbered and owned. So I assume 81 are max owned and unencumbered. Just trying to do the math on this one for potential payoffs to bondholders.

The 138 Sparrow (former REMIC) properties have $624.2 outstanding loan vs. 138 stores, or about $4.5 per store.
The Cascade/JPP loan facility have 88 properties securing $831.4 million, or about $9.4 million per property.

Assuming all those stores go to the respective lenders in whole in BK. Even if there are 81 unencumbered stores max, I can't imagine more than a $100 million payoff from them in total. IMO, Kenmore, Home Services, and Diehard won't fetch more than $500 m. Then it's a question of the warranty business (Sears Re), how much of capital does it have and will they be able to extract Kenmore/Diehard? So say about $500 million in assets unencumbered now.

Say the current assets cover the 1st lien, letter of  credit, and the second lien term loan. Then it's: $264.4 million of second lien notes, $231.2 million of the IP/Ground lease term loan, and $293.5 million of SRAC notes left to duke it out, all pretty much guaranteed either by holdings or most of its subs. About $789 million in total between these 3. I feel 2019 unsecured's are worth nothing in the end.


This is a very rough, 5 mile high view of the situation. I'm no BK expert and it's the first time I've been in a situation. $500 m of assets say to cover $789 m in debt? Doesn't seem so promising, but may not be too accurate, so please do correct me where I went wrong.

bizaro86

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Re: SHLDQ - Sears Holdings Corp
« Reply #9242 on: October 19, 2018, 01:52:03 PM »
I have no idea how valuable the unencumbered stores are, but a little over $1MM each seems pretty low to me. If you took either of the numbers from the secured stores you're getting a multiple of that.

Mephistopheles

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Re: SHLDQ - Sears Holdings Corp
« Reply #9243 on: October 19, 2018, 02:20:25 PM »
I have no idea how valuable the unencumbered stores are, but a little over $1MM each seems pretty low to me. If you took either of the numbers from the secured stores you're getting a multiple of that.

Right, I was just trying to be conservative. Secondly I don't know how many unencumbered stores they still have. It's kind of annoying that it's not reported in the the 10q. Also the value of each store can vary wildly as we all know. I guess all we can do is a property by property analysis to figure out which ones and how much each may be worth.

bizaro86

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Re: SHLDQ - Sears Holdings Corp
« Reply #9244 on: October 19, 2018, 03:25:09 PM »
For sure, lots of assumptions necessary. However, Seritage got $13.5 MM for 4 non big city KMart locations. I doubt unencumbered properties are crappier than those, so $3.375MM per property also seems like a reasonable/conservative guess on per property value.

Mephistopheles

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Re: SHLDQ - Sears Holdings Corp
« Reply #9245 on: October 19, 2018, 03:39:30 PM »
For sure, lots of assumptions necessary. However, Seritage got $13.5 MM for 4 non big city KMart locations. I doubt unencumbered properties are crappier than those, so $3.375MM per property also seems like a reasonable/conservative guess on per property value.

True

Now the question of how many properties does SHLD still own as of now. Anyone know where to direct me for that?

Value^2

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Re: SHLDQ - Sears Holdings Corp
« Reply #9246 on: October 20, 2018, 01:33:31 AM »
For sure, lots of assumptions necessary. However, Seritage got $13.5 MM for 4 non big city KMart locations. I doubt unencumbered properties are crappier than those, so $3.375MM per property also seems like a reasonable/conservative guess on per property value.

True

Now the question of how many properties does SHLD still own as of now. Anyone know where to direct me for that?

I think its about ~350... about same amount what eddie tries to buy.

 

Value^2

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Re: SHLDQ - Sears Holdings Corp
« Reply #9247 on: October 20, 2018, 01:41:36 AM »
Berko is now under 5% and won't be reporting going forward.

Based on latest 13G, he owns 4,578,440 shares ... ˇ4.2% of the SHLD.

I think he's still largest owner of 2019 unsecured bonds.


« Last Edit: October 20, 2018, 02:46:32 AM by Value^2 »

Mephistopheles

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Re: SHLDQ - Sears Holdings Corp
« Reply #9248 on: October 20, 2018, 08:18:05 AM »
For sure, lots of assumptions necessary. However, Seritage got $13.5 MM for 4 non big city KMart locations. I doubt unencumbered properties are crappier than those, so $3.375MM per property also seems like a reasonable/conservative guess on per property value.

True

Now the question of how many properties does SHLD still own as of now. Anyone know where to direct me for that?

I think its about ~350... about same amount what eddie tries to buy.

 

Can't be that many. Last 10-k showed 307 owned stores.

Eddie is proposing to buy 400 stores, not the real estate, but the actual operations (because they are EBITDA positive).

bizaro86

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Re: SHLDQ - Sears Holdings Corp
« Reply #9249 on: October 20, 2018, 08:20:26 AM »
Him buying 400 stores seems very positive to me, even if he takes them below current assets (inventory and cash in the till). Should be a big drop in severance/restructuring if he takes on a bunch of leases and employees.