Borders bookstores hanging by a thread…again


From the Associated Press:  Borders Group has received a commitment for a $550 million credit line from GE Capital, a lifeline that will help the struggling bookseller pay its vendors and stay afloat — but it indicated that bankruptcy protection might still be an option.
Its shares jumped 28 percent in aftermarket trading on the news.
The $550 million senior secured credit facility matures in 2014 and refinances the company’s existing debt.
Borders, based in Ann Arbor, Mich., sparked fears it would file for bankruptcy in December after it said it would delay payments to some vendors.
The company said it is still working with and landlords to restructure financing arrangements.
The GE refinancing agreement is subject to some conditions, including securing $175 million in credit from other lenders as well as $125 million in junior debt financing provided by some vendors and other lenders.
Borders and other booksellers have been hit hard as more people buy books online and at discount stores and grocers. Borders reported sales at its superstores open at least a year fell 14.6 percent for the crucial holiday period this year. That measurement is considered an important yardstick of a retailer’s health, because it excludes the effects of stores that open or close during the year.
Borders says the financing will help it fix its business, expand online and into the fast-growing electronic book business and cut costs. It said it was still considering “the possibility of an in-court restructuring,” implying a Chapter 11 reorganization.
Borders has cut jobs and shuttered stores to boost its finances while also shifting its focus from less-profitable categories such as music in order to concentrate more on children’s books, toys, stationery and its cafe.

By Brick ONeil

Author, Researcher, Writer: . Called 'a prolific writer' since 2001, work includes Blogging, Copywriting, Spreadsheets, Research, Proposals, Articles in the fields of real estate, dating, health, fitness, disease, disability, technology and food.

Leave a comment

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: