Borders Group US are facing D-day on April 1st. A substantial loan of $42.5m secured two years ago from Pershing Square Capital for the refurbishment of retail stores and an IT upgrade is due to be repaid on Thursday, this week.
A number of reliable financial sources, including Bloomberg US, are reporting late Tuesday evening that a deal for repayment will be in place before the Thursday deadline expires. Borders Group US has not recorded a profit since 2006 and there have been growing concerns this month that the book retailer would collapse and follow its former financial sibling Borders UK who went out of business in late 2009, despite re-ownership and reinvestment.
The latest security on the outstanding loan deal to Pershing Square Capital, if successful, will certainly buy the bookstore chain much needed time, but it long-term viability remains a long way off.
Borders Group US CEO, Ron Marshall, resigned in January of this year after an unsuccessful term trying to reverse the slide of the ailing retailer. Michael J. Edwards was hired as interim CEO in September of 2009 while Korn/Ferry International tried to find a long-term CEO replacement.