Borders Group Inc. has delayed payments to some of its vendors as the nation’s second-largest bookseller seeks to preserve cash while it struggles to refinance its debt.

The amount that Borders can borrow under its credit facility has been reduced because the value of its inventory has fallen. Borders spokeswoman Mary Davis said Thursday that the company will work with vendors to restructure their payment arrangements while it continues to try to refinance its senior credit facilities.

Borders has said that it is in talks with other possible lenders to replace its financing and that it may sell some assets to improve its cash position. It plans to close 16 stores during the fourth quarter, including four by ending leases early and the rest when their leases run out.

Borders Group earlier this month reported a wider third-quarter loss and a steep drop in sales just a few days after activist investor William Ackman offered to finance a Borders bid for its much larger rival, Barnes & Noble Inc.

Borders has been reporting losses for years, but its results worsened in recent quarters with heightened competition from Barnes & Noble and larger merchants including Amazon.com, Wal-Mart Stores Inc. and Target Corp.

CEO Mike Edwards said earlier this month that vendors have been supportive and its stores have plenty of inventory.Borders plans to close 16 stores during the fourth quarter.

 

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