JCPenney CEO Mike Ullman changed his mind in a hurry.
Despite telling investors just a day earlier that he saw no need to shore up the retailer’s liquidity, the struggling department-store chain announced late on Thursday that it would seek to raise as much as $1 billion in cash by issuing more stock.
Penney said it had begun a public offering of up to 92.6 million shares of common stock, saying only that it would use the net proceeds for general corporate purposes.
The news took Wall Street by surprise, as Ullman — who took the helm in April to repair damage from a botched turnaround bid by former CEO Ron Johnson — had told investors at a Wednesday meeting in New York that the company wouldn’t seek debt or equity financing this year.
“We don’t see conditions for the rest of the year where we’d need to raise liquidity,” he told a group of about 30 investors at the meeting hosted by Sterne Agee, according to a source who attended the private powwow.
Penney shares, which had staged a comeback earlier on Thursday after Penney released a statement repeating Ullman’s upbeat comments, fell 5.7 percent, to $9.83, in after-market trades — their lowest level in nearly 13 years.
A Penney spokesman didn’t respond to requests for comment.
“I’ve never seen anything like it — literally,” said one miffed investor. “The CEO is doing the exact opposite of what he told everybody he was going to do.”
Separately, Penney revealed in a securities filing that Mark Sweeney, senior vice president and financial controller, left the company Sept. 20.
Dennis Miller, senior vice president of finance, will serve as the company’s interim principal accounting officer.
Penney resorted to selling the shares — a move that will dilute current stockholders by more than a third — after several weeks of unsuccessfully trying to raise between $500 million and $1 billion in second-lien debt against assets, including its real estate, sources said.
“On the bright side, any liquidity concerns about the holidays are now over,” one Penney investor said.
Still, analysts don’t expect the move will be necessarily good for current owners of Penney’s stock.
Some on Wall Street were particularly surprised because Ullman had denied plans to raise capital only a day after Goldman Sachs published a bearish report that raised questions about Penney’s liquidity, mapping out potential bankruptcy scenarios.
Goldman’s scathing report followed a massive debt-financing package orchestrated by the investment bank this spring, which raised $2.25 billion in cash.
Ullman this week reiterated to shareholders that he expects Penney will end the year with $1.5 billion on its balance sheet, investors said.
Nevertheless, sources told The Post that the so-called “factoring” companies that finance clothing deliveries to Penney are tightening credit terms, shortening payment windows and tacking on extra surcharges as worries about the retailer’s business mount.