J.C. Penney (NYSE:JCP) is reportedly looking to land a $500 million loan to shore up its dwindling cash reserves. Sources familiar with the matter tell The Wall Street Journal that the beleaguered retailer is in discussions with lending firms and could close a deal within a couple of days. The loan would reportedly be backed by J.C. Penney’s inventory, accounts receivable, and intellectual property.
The news comes at a particularly interesting time in the company’s turnaround story. J.C. Penney recently ousted Ron Johnson from his position as CEO after his sales strategy failed miserably. Layoffs, lawsuits, and declining sales have defined the conversation surrounding the company and its stock, which climbed as much as 2.7 percent on Thursday on the news.
Earlier in the week, J.C. Penney reported that it was drawing $850 million from its credit line for working capital and to help purchase new inventory. At the beginning of February, the company reported that its cash hoard fell below $1 billion. Ahead of the loans, analysts suggested that the company wouldn’t have enough cash to finance operations for more than a year.
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