Sears Holdings Corp. will raise more than $2.5 billion by siphoning off 254 stores into a real estate investment trust, the struggling retailer said on Wednesday.
The newly formed REIT, Seritage Growth Properties, will buy and lease back the Sears and Kmart stores.

Shares jumped 7% to $44.22 in premarket trading.

The company’s decision to move forward with a REIT was anticipated, and represents another urgent effort to raise cash. The department store chain hasn’t turned a profit for several years.

It will fund the purchase, in part, with the money raised from shareholders through a rights offering. Billionaire CEO Eddie Lampert and his hedge fund, who together own almost half of the company, said they intend to fully exercise their pro-rata portion of the subscription rights.

The company also said on Wednesday that it was partnering with General Growth Properties to form a joint real estate venture, in which it will contribute 12 Sears properties located at GGP malls. In exchange, Sears Holdings will get $165 million in cash and a 50% stake in the venture.

“Today’s announcement demonstrates our ability to unlock a small portion of Sears Holdings’ vast and valuable real estate portfolio, and represents an important step in the continued transformation of Sears Holdings,” said Lampert in a statement.

As of the end of January, Sears Holdings owned or leased 1,725 Kmart and Sears stores.

Read more: Sears To Raise $2.5 Billion By Forming REIT

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