Bookseller Borders considers sale

Borders sold its UK operations in 2007

Borders, the US-based bookseller, has said it may be forced to put itself up for sale if it is unable to access funds to operate its business.

Despite taking out a $42.5m (£21.4m) loan to continue operating, it said gaining access to further funding was "expensive or entirely unavailable".

Borders, the second biggest bookseller in the US behind Barnes and Noble, began a turnaround plan last year.

Rival Barnes and Noble said it had not had any approach from Borders.

But it said that it would study any approach with interest.

Borders sold its Borders and Books Etc branches in the UK and Republic of Ireland to private equity group Risk Capital Partners.

It made a $125m loss after-tax on the sale of those book stores in 2007.

When that is taken into account, the company made an overall net loss in 2007 of $157.4m.

Challenging year

"This will be a challenging year for retailers due to continued uncertainty in the economic environment," said Borders chief executive George Jones.

"Looking forward to 2008 and beyond, the company determined that additional capital was required to execute our operating plan, and as a result we began to explore various financing options."

But he added that the "current credit environment has made many of these alternatives prohibitively expensive or entirely unavailable".

The bookseller said it had lined up a $42.5m loan from its largest shareholder, Pershing Square Capital Management, which would be sufficient to fund its business this year, giving it time to examine its future options.

Barnes and Noble said it had not yet been approached about buying Borders, but may consider it.

"We haven't been approached by Borders investment bankers, and if we are, we'll certainly take a good look at the company and put it under review," a Barnes & Noble executive said.