Blackstone Talking to PE Firms About Investment in JCP: Source

JC Penney
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Blackstone Group is talking to three private equity firms about investing in J.C. Penney and in discussions with banks about making a $500 million or greater loan to the struggling retailer that would be secured by inventory, according to a source.

The loan would be a five-year-term loan for the beleaguered department store chain, which has burned through cash over the past year to end its fiscal fourth quarter with $930 million in cash on its balance sheet. Its stock has also plummeted over the past year.

What is JC Penney doing now? (Click here to track the company's shares in premarket trade.)

The company has hired Blackstone financial advisory arm to explore how best to position the firm financially while key investor William Ackman said shareholders were willing to put up more capital.

(Read More: 'We're Not Going Anywhere,' Says Bill Ackman on JCP: Report)

The prospect of financial backing is likely to help soothe investors rattled by the department store chain's controversial decision this week to let go Apple alum Ron Johnson as CEO after a failed turnaround and bring back his predecessor — whose leadership was also much criticized.

(Read More: Ullman's Plan to Save J.C. Penney)

"Over the last several months or more, we have engaged outside advisers to provide us with their expertise about how to best position the company from a financial standpoint during the company's transformation," J.C. Penney told CNBC. "It is safe to assume this will continue as part of the work now underway as we develop a game plan for the company under Mike Ullman going forward."

— With reporting by CNBC's Scott Wapner