31 Jan 2011 23:15:59
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.
The chain announced in November that it would close 200 Waldenbooks and Borders Express stores and cut 1,500 jobs this month in order to become more profitable. Its deal with GE says it may close more stores.
As of Oct. 30, 2010, Borders operated 674 bookstores under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores, including 671 in the United States and three in Puerto Rico.
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.
The chain announced in November that it would close 200 Waldenbooks and Borders Express stores and cut 1,500 jobs this month in order to become more profitable. Its deal with GE says it may close more stores.
As of Oct. 30, 2010, Borders operated 674 bookstores under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores, including 671 in the United States and three in Puerto Rico.
