JC Penney to get $1.75B in financing

[April 30, 2013]  PLANO, Texas (AP) -- J.C. Penney on Monday confirmed that Goldman Sachs will provide it with $1.75 billion in financing.

Rumors about the financing had begun to circulate Friday.

The five-year senior secured term loan can be used to fund the company's operations as well as pay off some of its debt. It will be secured by real estate, as well as an interest the company's other assets and some of its subsidiaries.

J.C. Penney has been burning through cash. Earlier this month, it said it would draw $850 million from its $1.85 billion revolving credit line to pay for replenishing inventory, particularly for its overhauled home area.

The Plano, Texas-based company earlier this month fired its CEO, Ron Johnson, after 17 months on the job and rehired his predecessor Mike Ullman. An ambitious turnaround plan by Johnson had backfired and caused sales to plummet.

On Thursday, billionaire financier George Soros disclosed that he had taken a 7.9 percent stake in the company, making him its fourth largest shareholder. J.C. Penney shares jumped as much as 15 percent Friday, before closing up 12 percent at $17.

J.C. Penney shares rose 19 cents, or 1.1 percent, to close at $17.19 Monday.

[Associated Press]

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