Billionaire hedgie Eddie Lampert, 12 years and two months after taking control of Sears and overseeing a 93 percent decline in the company’s shares and $8 billion in red ink over the last five years, said Friday he has a plan to fix the ailing retailer.

Lampert’s latest plan to restart the growth engines on the foundering Sears and Kmart ships includes further cutting debt and pension costs by $1.5 billion and cutting costs by $1 billion.

The plan aims to add $140 million of badly needed liquidity.

Lampert also crowed that the company had “significantly improved” its operating performance in the fourth quarter and “made progress” toward profitability, though comparable store sales in the three months ended Jan. 31 are expected to fall 10.3 percent — 12.3 percent at the 702 Sears stores and 8 percent at the 801 Kmart stores.

Ever-optimistic investors plowed into shares of Sears Holdings on Friday, pushing the shares up 28 percent in early afternoon trading, to $711.

Lampert’s plans also involve making moves with its real estate portfolio, likely selling stores to REITS or renting out space to other retailers as it has done in the past.

The Hoffman Estates, Ill-based company continues to look for buyers for its Kenmore and Diehard brands in addition to its Sears Home Services and Sears Auto Centers businesses.

Last month, Sears Holdings said it would close 150 of its total of 1,503 stores, but Lampert did not announce specific plans of Friday to close more stores.

“We believe the actions outlined today will reduce our overall cash funding requirements and ensure that Sears Holdings becomes a more agile and competitive retailer with a clear path toward profitability,” Lampert, the company’s CEO and Chairman, said in a statement.

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