Kmart Credit Facility Amendment Approved

Kmart Corporation (NYSE: KM) today announced that it has received approval from its lenders and the U.S. Bankruptcy Court for the Northern District of Illinois for an amendment to the agreement governing its $2 billion debtor-in- possession (DIP) credit facility. The amendment, which received consents from all of the participants in Kmart's DIP syndicate, adjusts the covenant pertaining to the Company's cumulative earnings before interest, taxes, depreciation, amortization and other charges (EBITDA) over specified periods to provide Kmart with additional flexibility and better reflect the Company's sales performance since the commencement of its chapter 11 reorganization case.

"We are pleased that our lenders, as well as our statutory committees and the Bankruptcy Court, have approved the amendment we requested," said Kmart Chairman and Chief Executive Officer James B. Adamson. "The amendment provides the company additional flexibility as we continue to aggressively pursue opportunities to reduce costs and increase sales and margins. We appreciate this vote of confidence in the Company's forward-looking business plan."

Kmart Corporation is a mass merchandising company that serves America with more than 1,800 Kmart and Kmart SuperCenter retail outlets. Kmart in 2001 had sales of $36 billion.

Cautionary Statement Regarding Forward-Looking Information

Statements made by Kmart which address activities, events or developments that we expect or anticipate may occur in the future are forward-looking statements. Such forward-looking statements are and will be, as the case may be, subject to many risks and uncertainties, including, but not limited to, Kmart's having filed for bankruptcy and factors relating to Kmart's operations and the business environment in which Kmart operates, which may cause the actual results of Kmart to be materially different from any future results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include those set forth in Kmart's Annual Report on Form 10-K for the fiscal year ended January 30, 2002 or in other filings made, from time to time, by Kmart with the Securities and Exchange Commission. The forward- looking statements speak only as of the date when made and Kmart does not undertake to update such statements.

Similarly, these and other factors, including the terms of any reorganization plan ultimately confirmed, can affect the value of our various pre-petition liabilities, common stock and/or other equity securities. No assurance can be given as to what values, if any, will be ascribed in the bankruptcy proceedings to each of these constituencies. A plan of reorganization could result in holders of Kmart common stock receiving no value for their interests. Because of such possibilities, the value of the common stock is highly speculative. Accordingly, we urge that appropriate caution be exercised with respect to existing and future investments in any of these liabilities and/or securities.


SOURCE: Kmart Corporation

CONTACT: Kmart Media Relations, +1-248-463-1021

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