News Borders Negotiates Credit Line, Delays More Payments
posted on 2011-02-02 22:23 EST
The Publishers Weekly trade magazine reported that the bookstore chain Borders delayed its January payments to publishers in an attempt to conserve cash. Borders also delayed similar payments earlier in January and reportedly hoped to convince publishers to treat the company's debts as loans. The deadline for publishers to agree to this offer was February 1.
The financial news site Bloomberg reported on Tuesday that Borders "may file for protection from creditors as soon as next week" and may also close 150 stores, despite statements from Borders that it is attempting to maintain its relationships with publishers and vendors. The Wall Street Journal newspaper added on Wednesday that the bankruptcy filing may be delayed until the middle or the end of February. Borders stock dropped 36% after Bloomsberg's report, and dropped another 18% on Wednesday.
Borders negotiated a US$550 million credit line from GE Capital subject to conditions, including the publishers agreeing to grant Borders credit.