Borders Sharply Lower After Delaying Vendor Payments (BGP)

Borders BGP reported yesterday that it will delay payments to certain parties including vendors, landlord, etc. Borders has chosen this plan of action in attempt to retain liquidity as it seeks to complete its refinancing or restructuring plans. After receiving a commitment from GE Capital to provide $550 million for a secured credit facility, it still needs to meet conditions GE Capital has set in order to collect the funds it has offered. While this is not the news vendors were hoping for, Borders believes it is in the long-term best interest for all parties involved. Borders closed on Friday at $0.85 cents after a brief spike above $1.00 in after-hours trading on Thursday. Today's trading shows a massive disappointment to that confidence, as shares are currently over 15% lower in pre-market trading.