TORONTO, Sept. 10 /CNW/ - Sears Canada Inc. (TSX: SCC) announced today that its Board of Directors declared that an extraordinary cash dividend of CAD $3.50 per share on all Common Shares of the Company, or approximately CAD $376.7 million, will be paid on September 24, 2010 to shareholders of record as at the close of business on September 22, 2010.
The Company also announced that the Board of Directors has approved the Company entering into a CAD $800 million Senior Secured Revolving Credit Facility with a syndicate of lenders. The closing of the facility is expected to occur on September 10, 2010, and the availability of the facility will be subject to a number of customary funding conditions and to the prior payment or defeasement of the Company's outstanding medium term notes due September 20, 2010. The facility is expected to be available for five years to fund working capital needs, capital expenditures, acquisitions and other general corporate purposes.
The Board of Directors has also approved the Company making a loan of CAD $400 million to Sears Holdings Corporation of Hoffman Estates, Illinois. The loan is expected to be made within the next five business days and is to remain outstanding for no more than 60 days.
Sears Canada hereby notifies shareholders that it designates the full amount of the dividend to be paid on the common shares, to be an "eligible dividend" as defined in subsection 89(1) of the Income Tax Act (Canada), and in any similar provincial and territorial tax legislation.
This release contains information which is forward-looking and is subject to important risks and uncertainties. Forward-looking information concerns the Company's plans to enter into the credit facility and the intercompany loan. Factors which could cause actual results to differ materially from current expectations include, but are not limited to the satisfaction of typical closing conditions. While the Company believes that these transactions will proceed, there can be no assurance that the applicable conditions of closing will be satisfied.
Sears Canada is a multi-channel retailer with a network of 197 corporate stores, 241 dealer stores, 31 home improvement showrooms, over 1,800 catalogue merchandise pick-up locations, 108 Sears Travel offices and a nationwide home maintenance, repair, and installation network. The Company also publishes Canada's most extensive general merchandise catalogue and offers shopping online at www.sears.ca.
For further information:
Sears Canada, Corporate Communications
416-941-4425
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