GE Capital provided a commitment to help struggling Borders Group restructure its finances with a “$550 million senior secured credit facility.”
At the same time, the deal comes with a few conditions: Borders must secure help from other sources to arrange for $125 million in “junior debt financing” to cover vendor debts and continue with store closures (“the identification of underperforming stores that will be closed as soon as practicable”).
Borders Group President Mike Edwards had this statement in the release: “[I]t is prudent as well for Borders to explore alternative avenues, including the possibility of an in-court restructuring. We are confident that whatever path Borders pursues to implement its strategy, we will be able to count upon the support of our vendors, who understand the critical role a strong Borders provides to the reading public.”