Borders Bankruptcy 2011
July 18, 2011 by staff
Borders Bankruptcy 2011, Borders Group Inc BGP.N repay a loan to its largest investor and more secure access to credit as it reported a sharply higher quarterly profit, giving much space to breathe the bookseller sick. Shares of the bookstore No. 2 U.S. specialty rose 30.8 percent to 2.25 and after hours. Borders said he returned to 42.5 million hedge fund in New York, Pershing Square Capital Management, who had taken to improve the technology and the remodeling of its stores, which confirms what a source familiar with the matter had told Reuters earlier on Wednesday [ID: nN31165884].
The loan had been extended three times due on April 1. Borders said it had entered into an amended and 700 million revolving credit agreements expiring in March 2014, replacing an agreement before it matures in July 2011 and closed in one center and 90-million term loan credit. [ID: nPnDE79610]
“The fact that they were able to align a loan that is greater than the 42.5 million and Pershing to be … which is to avoid bankruptcy as a real option in the short term,” said Michael Souers, ananlyst with Standard & the poor.
Pershing Square, run by William Ackman, owns 17.7 percent of the borders and has invested in the library since 2006. The fund is known for making only a handful of investments at once, often focuses on retailers like Target (TGT.N).
Last month during a television interview, Ackman threw cold water on speculation that the company declares bankruptcy, to reassure investors worried about what the decline in sales means for the future of the company.
Ackman also said at the time that the borders could result in a consolidation of the booksellers with its larger rival, Barnes & Noble Inc (BKS.N).
Barnes & Noble has been able to regain some lost sales for e-book market with its e-readers corner, which was launched in October. The borders are only expected to launch its own electronic library this spring in collaboration with the electronic download service Kobo Inc.
Barnes & Noble is under pressure from one of its main stakeholders, the billionaire investor Ron Burkle, which seeks to double its stake in the company. Burkle has pressed board Barnes & Noble to add new independent directors, according to a regulatory filing Wednesday. [ID: nN31245585]
Borders also has had to deal with turnover in the ranks of executives. In January, Ron Marshall resigned as chief executive after only about a year with the company. Then, the company named Michael Edwards, who had been director of marketing, as interim CEO.
Border Riders book on new facilities and 700 million were: Banc of America Securities LLC (BAC.N), Wells Fargo Retail Finance LLC (WFC.N), JP Morgan Securities Inc (JPM.N) and GE Capital Markets Inc (GE.N).
With the help of REFUND
The company also reported a sharply higher quarterly profit as a tax refund in an earlier loss and reduces costs enough to mitigate a sharp decline in sales.
Benefits of the boundaries of operation got a boost during the quarter as the chain continued elimination of low margin products such as CDs and DVDs.
“There have been improvements in its cost structure and cash flow generation. But they have been slow from the strategic point of view to enter the e-books,” said Souers.
Net income for the borders and almost doubled to 59.9 million, or 91 cents per share for the quarter ended January 30, 2010, and 29.6 million, or 49 cents per share, year earlier.
Sales in its namesake department stores open at least a year fell 14 percent during the quarter, which included the key Christmas shopping season. Total sales fell 13.3 percent to 937.3 million y.
Borders is struggling with declining sales amid increased competition from rivals such as Barnes & Noble (BKS.N) and Amazon.com (AMZN.O), including a move reader’s e-book formats.
In recent months, the company has closed more than half of the stores in your Waldenbooks chain, where same-store sales fell 8.5 percent in the quarter and whose costs have weighed on the margins of borders. ” Shares rose 53 cents in after-hours transactions on a closing price of 1.72 and Wednesday.
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