Bookseller Borders Group has repaid a two-year-old loan from its largest shareholder, hedge fund Pershing Square Capital Management, amidst a rare spate of good news for the troubled retailer.
Ann Arbor, Mich.-based Borders paid off the $42.5 million it owed the New York-based hedge fund after securing nearly $800 million in new credit lines. Pershing Square extended the loan in March 2008 to keep Borders afloat.
“We are pleased to have the continued support of our lending group and term loan investors,” Borders CFO Mark Bierley said. “With the completion of these transactions, the company can turn its focus to driving sales growth and improving profitability.”
Borders also reported that its fourth-quarter earnings from continuing operations more than doubled, even though sales continued to decline.