Department store retailer Sears Canada has been granted court approval to begin a sale and investment solicitation process (SISP) to seek proposals for the acquisition of, or investment in, the group's business or assets.

In an announcement today (14 July), Sears Canada said the group has obtained orders from the Ontario Superior Court of Justice that it was seeking in support of its restructuring efforts under the Companies' Creditors Arrangement Act (CCAA).

The company was granted creditor protection under the CCAA on 22 June. Sears Canada said it expects to axe around 2,900 jobs and shutter 59 stores as part of the court-supervised restructuring of the business.

Sears Canada to axe 2,900 jobs, close stores amid restructure

Now, the retailer said it has been granted an extension of the stay period provided by the initial order up to 4 October, and that the SISP deadline for binding offers from parties interested in pursuing a transaction is 31 August.

Meanwhile, the company has also reached an agreement with a variety of stakeholders and their counsel to maintain special payments to the defined benefit component of the Sears Registered Retirement Plan, payments in support of post-retirement health and dental benefits, and post-retirement life insurance premiums until 30 September. At that time, Sears Canada says it expects to have "further clarity" regarding the potential outcome of its restructuring efforts under the CCAA.

Last week, Sears Canada filed motion materials to suspend such payments, stating cash constraints had resulted in "challenges" for a number of valued stakeholders, including "associates whose positions were recently eliminated or will be eliminated when a number of Sears Canada locations across the country close", retirees, suppliers and landlords.

The company previously announced that it could not continue its restructuring efforts outside of a CCAA proceeding and that it was "not able to make payments to certain stakeholders; payments it would normally make if it were not cash constrained and operating under the protection of the CCAA".

Sears Canada seeks to suspend some supplier payments

Meanwhile, the group's DIP financing of US$450m has been approved by the court on a final basis and the retailer says it has filed motion materials regarding the commencement of a liquidation process at its locations that are due to close. It expects to seek an order on 18 July.