* Book chain seeks $450 mln to fund Chapter 11
* Efforts to syndicate loan going slowly
WILMINGTON, Del. Feb 15 Ailing book chain
Borders Group Inc BGP.N is seeking a $450 million loan to
keep its shelves stocked during an imminent Chapter 11
bankruptcy, Reuters Loan Pricing Corp reported on Tuesday.
GE Capital Corp is preparing the financing, known as a
debtor-in-possession or DIP loan, RLPC said, citing sources.
In January, Borders had said that GE Capital had agreed to
provide a $550 million credit facility as long as certain
conditions were met, including closing stores and arranging
financings with other lenders, suppliers and landlords.
Borders said at the time of announcing the GE Capital
commitment that alternatives to that financing could include a
The company is expected to file for Chapter 11 by the end
of the month, sources have told Reuters.
GE Capital is trying to syndicate the loan, and RLPC
reported that efforts to find investors for the loan are moving
The loan includes a $410 million revolving credit, a $20
million term loan and $20 million in letters of credit, RLPC
reported, citing sources.
Borders and GE Capital did not immediately return a call
Borders is also considering bids from liquidators who were
asked for their proposals to close around 200 U.S. locations,
including both Borders superstores and smaller Waldenbooks
shops, sources told Reuters on Monday. [ID:nN14108589]
Borders has suffered from years of intensifying competition
from Internet retailers such as Amazon.com Inc (AMZN.O) and
discount retailers such as Costco Wholesale Corp (COST.O),
which offer cut-rate prices on bestsellers.
The company that helped pioneer book superstores that stock
more than 100,000 titles was also much slower to respond to the
growing popularity of e-readers such as Nook, which helped
boost holiday sales at the largest U.S. bookstore chain, Barnes
& Noble Inc (BKS.N).
(Reporting by Tom Hals, with additional reporting by Leela
Parker and Caleb Frazier in New York; Editing by Tim Dobbyn)