Borders Group is delaying payments to some of its vendors as the nation's second-largest bookseller seeks to preserve cash while it struggles to refinance its debt.
Shares fell more than 15 percent in after-hours trading.
Borders spokeswoman Mary Davis said Thursday that the company will work with vendors to restructure their payment arrangements while it continues to work to refinance senior credit facilities. But Ann Arbor, Mich.-based Borders warns that there is no assurance that it will be able to refinance that debt. Without financing, it could violate terms of its debt in the first quarter of 2011 and "experience a liquidity shortfall."
Borders Group Inc. earlier this month reported a wider third-quarter loss and a steep drop in sales. Traditional book sales are declining, and Borders faces tough competition from online retailers and discount stores -- as well as growing challenges from electronic books.