The retailer (TSX:SCC), known for catalogues that were a staple in the homes of generations of Canadians, saw its shares plummet by 39 per cent to 70 cents on the Toronto Stock Exchange minutes after the opening bell.
"The company continues to face a very challenging environment with recurring operating losses and negative cash flows from operating activities in the last five fiscal years, with net losses beginning in 2014," Sears Canada said in a statement.
"While the company's plans have demonstrated early successes, notably in same-store sales, the ability of the company to continue as a going concern is dependent on the company's ability to obtain additional sources of liquidity in order to implement its business plan." Sears Canada said it had expected to be able to borrow $175 million, but that has been reduced to about $109 million.
It said it also lacks other assets, such as real estate, that can be monetized in a timely manner.
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