DOW JONES NEWSWIRES
Borders Group Inc. (BGP) said it has received a potential $550
million of financing from General Electric Co.'s (GE) financing
arm, but the struggling bookseller said it still isnt ruling out
"in-court restructuring."
Shares soared 43% to $1.15 after hours. As of the close, the
stock had fallen 14% in the past year.
The troubled retailer said the commitment from GE Capital will
provide it with "the financial flexibility and an appropriate level
of liquidity to move forward with its strategy to reposition its
business model and the Borders brand."
The commitment is contingent on several conditions, such as the
successful syndication of $175 million of the senior credit line
with other lenders, as well as $125 million of junior debt
financing from vendors and other lenders.
"We view the refinancing route as the most practical, efficient
and beneficial to all parties, and we are working with our vendors
in this regard," said President Mike Edwards, but he noted that "it
is prudent as well for Borders to explore alternative avenues,
including the possibility of an in-court restructuring."
Borders has struggled mightily, hurt by sliding sales amid the
rising popularity of ebooks. The company has said it is considering
the sale of certain assets, and the company's second-biggest
shareholder has pushed for a merger with bigger rival Barnes &
Noble Inc. (BKS).
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com;