To pay for its ongoing spending, cash-strapped department store retailer J.C. Penney announced plans on Monday to draw on nearly half of its revolving credit facility.
The company has drawn $850 million out of its $1.85 billion committed revolving credit facility, money that will be used to pay to replenish inventory levels in anticipation of the completion of its newly renovated home departments next month.
"The draw under our revolver today provides more than our current funding needs to ensure our continued liquidity," said Ken Hannah, the company's chief financial officer, in a release. Moreover, we will continue to explore additional capital raising alternatives with the assistance of our financial advisors."
Just last week, news broke that Blackstone Group is talking to three private-equity firms about investing in J.C. Penney and is 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 retailer 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.