Borders CEO "comfortable" with liquidity
ANN ARBOR, Michigan (Reuters) - U.S. bookstore operator Borders Group Inc (BGP.N) has a "comfortable" liquidity position that allows it more "flexibility" in evaluating bids from potential buyers, its chief executive said on Thursday.
"Being in a better position in terms of our liquidity and debt certainly gives us more flexibility in terms of evaluating the offers," CEO George Jones said in an interview.
Borders, the No. 2 U.S. bookseller after Barnes & Noble Inc (BKS.N), has been working to cut operating expenses and reduce inventory to help offset declining sales.
Based in Ann Arbor, Michigan, Borders put itself up for sale in March. Barnes & Noble has said it was interested in possibly acquiring its rival.
Borders has struggled with liquidity issues, but recently received a new financing commitment from its largest shareholder, Pershing Square Capital Management.
William Ackerman, the billionaire hedge fund manager who is the founder of Pershing Square Capital Management, said this week the bookseller should consider selling the company to online retailer Amazon.com Inc. (AMZN.O)
Jones said the company was still in the beginning of the sale process and remained on track to meet its own restructuring targets and reduce its debt this year.
"We are headed to getting our debt levels down to a very healthy level... by the end of the year," he said.
Borders' agreed to sell its 30 bookstores in Australia, New Zealand and Singapore to A&R Whitcoulls, owned by privately held Pacific Equity Partners, for an immediate cash infusion of $90 million and expects up to an additional $14 million in deferred payments by March.
"We are in pretty good shape right now," Jones said, referring to the company's debt.
Jones said his top priorities were to improve its U.S. superstore business and boost overall profitability.
The company reported a loss and declining sales for the first quarter. Following the results, the company announced it is cutting roughly 20 percent of its corporate work force, including 156 corporate positions at its headquarters.
(Editing by Leslie Gevirtz)
