Shares of Borders Group Inc. jumped 12 percent on a news report that the troubled bookseller is close to securing financing it needs to stay afloat.
The New York Times reported late Thursday, citing sources it did not name, that Borders executives told publishers they were close to securing refinancing from GE Capital and other lenders.
The bookseller has struggled for several years and said last month it had delayed payments to some vendors to preserve cash while it tries to refinance its debt. Earlier this week Borders said it will close one of its three distribution centers in mid-July and eliminate the 310 jobs.
Borders spokeswoman Mary Davis said the company does not comment on outside reports on the company.
"As we have said, we are working with lenders on refinancing and, as part of this, are in discussions with certain vendors," she said.
GE Capital did not respond to a request for comment.
S&P retail analyst Michael Souers upgraded his opinion on the company to "Hold" from "Sell" based on the report.
"While we expect the terms of a possible refinancing as onerous, and maintain that the company's battle for long-term survival remains an arduous uphill climb, refinancing would provide the company with much-needed time to strategize," Souers wrote.
Borders shares rose 12 cents, or 14.3 percent, to 93 cents in midday trading. The stock has traded between 78 cents and $3.29 during the past 52 weeks.
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