UPDATE 1-Borders and Pershing extend loan agreement
SAN FRANCISCO, March 30
SAN FRANCISCO, March 30 (Reuters) - Borders Group Inc BGP.N said on Monday it had extended by one year its $42.5 million senior secured term loan with Pershing Square Capital Management, its largest shareholder.
The loan, which includes an interest rate of 9.8 percent, will be extended from April 15, 2009, until April 1, 2010, the book seller said in a statement.
Borders also said it would allow its option to sell its U.K. based Paperchase business to Pershing to expire, and said it was resetting the strike price on Pershing Square's 14.7 million warrants to 65 cents per share.
The financing deal with Pershing, signed a year ago, gave the private equity group 9.55 million warrants to buy Borders stock at $7.00 per share. Warrants for another 5.15 million shares were given after the bookseller failed to find a buyer for the company by a prearranged deadline.
Borders, which is scheduled to report fourth-quarter results on Tuesday, had twice renegotiated the deadline for repayment of the $42.5 million loan earlier this year.
After struggling with liquidity issues last year, Borders ousted its chief executive and brought in as CEO former private equity executive Ron Marshall, who has experience in turning around ailing companies.
The No 2 brick-and-mortar book seller, behind Barnes & Noble Inc (BKS.N), which operates stores under the Borders and Waldenbooks names, has said it will aggressively cut costs as it tries to shore up its balance sheet.
Shares of Borders, which are down 89 percent since a year ago, closed on the New York Stock Exchange at 65 cents. (Reporting by Alexandria Sage; Editing by Phil Berlowitz)
- Obama makes rare campaign trail appearance, people leave early
- Obama makes rare campaign trail appearance, some leave early
- Turkey to let Iraqi Kurds reinforce Kobani as U.S. drops arms to defenders |
- Nigeria declared Ebola-free, holds lessons for others |
- Former 'American Idol' contestant Joanne Borgella dies at 32