Sears just scored a critical deal to extend its lifeline

Sears

(A Sears store is seen on February 28, 2014 in Coral Gables, Florida.Joe Raedle/Getty Images)

Sears' lenders are giving the embattled retailer more time to pay off its debt.

Short on cash, Sears negotiated a deal to delay a majority of its repayment for a $500 million secured loan facility until January, with the option to extend that deadline by another six months, the company said Tuesday.

The repayment was originally due in July. Sears will now pay $100 million in July, instead of the full amount.

Sears also said it will pass off $515 million in pension obligations to MetLife.

The deals will buy Sears more time to cut costs and try to turn business around.

Sales have been plunging — falling by more than 50% since 2009 — and the company is burning through cash, closing hundreds of stores, and selling off assets in an attempt to stanch the bleeding.

Sears' situation grew even more dire this month as the company revealed that some suppliers are trying to cancel contracts and cut back on orders amid fears that the retailer could soon go bankrupt.

Sears says the new financing deals will help it reach its goal of reducing outstanding debt and pension obligations by $1.5 billion for fiscal 2017.

"These actions serve to reduce the size of the Company's debt and pension obligations, as well as future risk associated with the company's liabilities," Sears said in a news release.

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