Wednesday, January 5, 2011

Borders Discusses Deferred Payments With Publishers

NY Times:
Borders began holding talks with publishers on Tuesday, seeking to convert delayed payments into interest-bearing debt as part of a plan to refinance its debt, according to people briefed on the matter.

Borders has been in talks with lenders, including GE Capital and Jefferies, to refinance its existing bank loans from a group led by Bank of America, these people said. Bank of America and GE Capital were two of the lenders that provided the company with as much as $970.5 million in financing through a revolving credit deal last year.

One of the requirements attached to the potential refinancing is to persuade enough publishers to agree to deferred payments. To that end, Borders has been setting up meetings with publishers in New York this week. Such talks are always delicate, given the company’s dependence on receiving new shipments of books. ...