Borders ceo search is over as the company awards the title to two men. Bennet LeBow further confirmed the extent to which he has taken over the company by making himself chief executive officer of Borders Group as well as chairman of its board.
Interim ceo Mike Edwards will stay on as well, keeping the titles of president and ceo of Borders, Inc. running the US bookselling business and reporting to LeBow. Edwards joined Borders last September. He tells Reuters, “Ben has a very sound financial background, understands capital markets, is very astute in managing liquidity in turnaround situations and has a very strong network.” The service adds, “LeBow will act as an executive chairman, run the board and manage relations with the financial community, Edwards said.”
On the liquidity front, we just took a look at Borders lastest quarterly filing with the SEC from last week. As of May 1, the company had outstanding borrowings of $241 million under their credit agreement. They said that the current covenants make an additional $135.4 million of borrowing available before a ” minimum excess availability covenant” of $50 million kicks in. After that provision, funding available was $85.4 million.
Vendors continue to be a prime source of credit for the company, now financing
“approximately 45% of our inventory (calculated as trade accounts payable divided by merchandise inventories). As of May 1, trade accounts payable were $348.5 million. Merchandise inventories were $836.2 million, about $57 million lower than a year ago.