By Sakthi Prasad

(Reuters) - Orchard Supply Hardware Stores Corp has filed for Chapter 11 bankruptcy protection, court documents showed on Monday, with rival retailer Lowe's Companies set to buy the majority of its assets for $205 million in cash.

Orchard, which was spun off by Sears Holdings Corp in late-2011, said it was carrying a high debt load and that it may not be in a position to make scheduled payments when the first tranche of its debt matures in December 2013.

"The company's substantial debt due, in part, to significant recapitalization dividends paid to Sears, made it difficult, if not impossible for the company to right itself. The ever present prospect of violating the company's leverage ratio covenants hampered many of its operational strategies," Orchard said in the court filing.

Management and the board determined that a sale of Orchard through a Chapter 11 process was the best possible outcome for the company and its stakeholders after exploring a range of alternatives, the company said.

The company, which generated revenue of $657 million in the 2012 fiscal year, listed total liabilities of $480.1 million and total assets of $441 million, according to a court filing.

Orchard said it has secured commitments for $177 million in debtor-in-possession (DIP) financing, which will help it to continue meeting its financial obligations throughout the Chapter 11 case.

LOWE'S ACTS AS "STALKING HORSE" BIDDER

The company said that Lowe's would act as a "stalking horse bidder" in an auction of Orchard's assets, serving as a minimum offer for the business which could still be topped by others.

If there are no competing bids that tops Lowe's offer, then the home improvement retailer will end up sealing the asset-purchase deal after obtaining bankruptcy court approval.

Lowe's said in a statement it would acquire no less than 60 of Orchard's 91 neighborhood hardware and garden stores in California and in addition to the $205 million cash price the acquisition would also include the assumption of payables owed to Orchard suppliers.

With 110 bigger Lowe's stores across California, the company said it plans to have Orchard operate as a separate, standalone business, retaining its brand and current management.

"Strategically, the acquisition will provide us with immediate access to Orchard`s high density, prime locations in attractive markets in California, where Lowe`s is currently underpenetrated, and will enable us to participate more fully in California`s economic recovery," said Lowe's chairman, president and chief executive Robert Niblock.

Orchard expects the bankruptcy process to be completed in about 90 days.

Shares in Orchard closed at $1.88 on Friday.

The case is in re Orchard Supply Hardware Stores, Case No. 13-11565, U.S. Bankruptcy Court, District of Delaware.

(Reporting by Sakthi Prasad in Bangalore; Editing by Patrick Graham and Greg Mahlich)

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NEW YORK (AP) — Netflix is going to start running original television series from Dreamworks Animation.

Financial terms were not disclosed.

Netflix Inc. says the multi-year agreement is its biggest deal ever for original first-run content and includes more than 300 hours of new programming. It expands on an existing relationship between the companies.

The transaction is part of a major initiative by DreamWorks Animation to expand its television production and distribution worldwide.

The new shows will be inspired by characters from DreamWorks' hit franchises like "Shrek" and "Kung Fu Panda" and upcoming feature films as well as the Classic Media library.

The first series expected to begin airing in 2014 and will be shown in the 40 countries in which Netflix operates.

In February the companies announced their first ever Netflix original series for kids based on the film "Turbo."

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By Dinesh Nair and Andreas Cremer

DUBAI/BERLIN (Reuters) - Qatar Holding, the investment arm of the Gulf state's sovereign wealth fund, has sold its 10 percent stake in Porsche SE to the luxury carmaker's family shareholders, four years after it first invested in the firm.

Qatar Holding, which owns stakes in some of the world's largest companies, said it sold the common shares in the automaker to the Porsche and Piech families. It did not disclose the value of the transaction.

The sovereign fund arm said it remained committed to the Integrated Automotive Group which includes Volkswagen and Porsche through its 17 percent stake in VW. Europe's largest automaker last year sealed the purchase of Porsche's car-making business after a merger failed in a tangle of legal disputes.

"This transaction results as a logical step after the creation of the Integrated Automotive Group between Volkswagen and Porsche AG as finalized in 2012," Qatar Holding said in the statement.

Neither party gave any details of the price paid for the stake. Porsche SE shares were trading at 60.76 euros per share on Monday, up 0.36 percent on the day.

Porsche was forced to sell a 10 percent voting stake to Qatar Holding in 2009 as a way to prop up its strained finances. The Qatar sale gave outsiders a say in the debt-saddled family-controlled auto group for the first time since it started building Porsche branded cars in 1948.

Porsche's holding company, controlled by the Porsche and Piech families, still holds about 51 percent of VW common stock, making it one of three big controlling interests in the German car group.

VW, in return, now owns all of Porsche's core business, the automotive division that makes models such as the iconic 911 sports car and the Cayenne sport-utility vehicle.

"This is a matter between the Porsche/Piech families and Qatar," Porsche SE spokesman Albrecht Bamler told Reuters by phone on Monday, declining to elaborate.

"This (sale by Qatar) is positive" because the stake is returning to the hands of the Porsche/Piech families," Bamler added.

Porsche and Volkswagen had first agreed a full merger in August 2009, after Porsche racked up more than 10 billion euros of debt in a failed attempt to take over VW, sparking feuds among the Porsche and Piech family dynasties.

The Integrated Automotive Group to which the Qatar statement refers is the group of brands which now make up Volkswagen's global business after it came to terms with Porsche after several years of wrangling.

"By assuming its investment in Volkswagen and Porsche in 2009, Qatar Holding acted as a facilitator paving the way for the creation of the Integrated Automotive Group," the fund said.

Qatar Holding also said on June 11 it participated in a 1.2 billion mandatory convertible note sale by Volkswagen as an anchor investor.

(Reporting by Dinesh Nair and Andreas Cremer; Editing by Patrick Graham)

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