Borders Group, Inc. (NYSE:BGP) said this past week that they have received a $550 million in refinancing loan from GE Capital. The company has to meet certain requirements for the loan including converting delayed payments into loans for publishers.
Borders was considering bankruptcy as an option. ?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,? stated Borders CEO and Chairman of the Board. ?At the same time, given the current environment surrounding Borders, and in order to assure that the company can pursue its efforts to position itself to properly implement its business plan, it is prudent as well for Borders to explore alternative avenues.?
Borders needs to raise $125 million in junior debt financing by converting the vendor payables or from other sources in order to lock in the secured financing from GE Capital. One of Borders largest shareholders William A. Ackman said that he would be willing to loan Borders $960 million to finance a merger with Barnes & Noble.